<PAGE>

      As filed with the Securities and Exchange Commission on May 2, 1997
                                                       Registration No. 333-
===============================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                            ---------------------
                                   FORM S-1
                            REGISTRATION STATEMENT
                                     Under
                           THE SECURITIES ACT OF 1933
                            ---------------------
                              inTEST Corporation
            (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                    <C>                                        <C>
           Delaware                                3999                        22-2370659
(State or other jurisdiction of        (Primary Standard Industrial          (I.R.S. Employer
 incorporation or organization)            Classification Code No.)          Identification No.)
</TABLE>


         2 Pin Oak Lane, Cherry Hill, New Jersey 08003, (609) 424-6886
(Address, including zip code, and telephone number, including area code, of
                   registrant's principal executive offices)

         ALYN R. HOLT                               ROBERT E. MATTHIESSEN
Chairman and Chief Executive Officer      President and Chief Operating Officer

                              inTEST Corporation
         2 Pin Oak Lane, Cherry Hill, New Jersey 08003, (609) 424-6886
(Name, address, including zip code, and telephone number, including area code,
                             of agent for service)

                                  Copies to:

        CHARLES C. ZALL, ESQ.                        BARRY M. ABELSON, ESQ.
     Saul, Ewing, Remick & Saul                Pepper, Hamilton & Scheetz LLP
      3800 Centre Square West                      3000 Two Logan Square
  Philadelphia, Pennsylvania 19102                 18th and Arch Streets
           (215) 972-7777                     Philadelphia, Pennsylvania 19103
                                                        (215) 981-4000
                                
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
                            ---------------------

     If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

     If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of earlier effective 
registration statement for the same offering. / /

     If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /


                         CALCULATION OF REGISTRATION FEE
==============================================================================
                                      Proposed
                                      Maximum            Amount of
   Title of Each Class of            Aggregate          Registration
Securities to be Registered     Offering Price (1)         Fee
- ------------------------------------------------------------------------------
Common Stock   ...............      $27,470,625           $8,324
==============================================================================

(1) Estimated solely for purposes of calculating the registration fee pursuant
    to Rule 457(o) of Regulation C under the Securities Act of 1933, as amended.
    Includes 341,250 shares that the Underwriters have the option to purchase
    from the Selling Stockholders solely to cover over-allotments, if any.

     The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
==============================================================================


<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
 
                    SUBJECT TO COMPLETION, DATED MAY 2, 1997

                               2,275,000 Shares

                                 [COMPANY LOGO]

                                  Common Stock
                            ---------------------
     Of the 2,275,000 shares of Common Stock offered hereby, 1,820,000 are being
sold by inTEST Corporation ("inTEST" or the "Company") and 455,000 shares are
being sold by certain stockholders of the Company (the "Selling Stockholders").
The Company will not receive any of the proceeds from the sale of shares by the
Selling Stockholders. See "Principal and Selling Stockholders."

     Prior to the offering, there has been no public market for the Common
Stock. It is currently estimated that the initial public offering price for the
Common Stock will be between $8.50 and $10.50 per share. See "Underwriting" for
information relating to the factors to be considered in determining the initial
public offering price. The Company has applied to have the Common Stock approved
for quotation on the Nasdaq National Market under the symbol "INTT."
                            ---------------------
                Prospective investors should carefully consider
                       "Risk Factors" beginning on page 5.
                            ---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
 AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
   THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
    COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
      ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
   


<TABLE>
<CAPTION>
=========================================================================================

                                  Underwriting
                    Price to     Discounts and      Proceeds to         Proceeds to
                     Public      Commissions(1)     Company(2)      Selling Stockholders
- -----------------------------------------------------------------------------------------
<S>                <C>          <C>                <C>             <C>
Per Share  ......     $               $                 $                   $
- ------------------------------------------------------------------------------------------
Total(3)   ......    $               $                $                   $
==========================================================================================
</TABLE>

(1) The Company and the Selling Stockholders have agreed to indemnify the
    Underwriters against certain liabilities, including certain liabilities
    under the Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting estimated expenses of $655,000 payable by the Company.
(3) The Selling Stockholders have granted the Underwriters an option,
    exercisable within 30 days after the date of this Prospectus, to purchase up
    to 341,250 additional shares of Common Stock solely to cover
    over-allotments. If this option is exercised in full, the total Price to
    Public, Underwriting Discounts and Commissions and Proceeds to Selling
    Stockholders will be $_____________, $____________ and $____________,
    respectively. See "Underwriting."
                            ---------------------

     The shares of Common Stock are offered by the several Underwriters named
herein subject to prior sale, receipt and acceptance by them and subject to
their right to reject orders in whole or in part. It is expected that the
delivery of the certificates for such shares will be made on or about     , 1997
at the office of Janney Montgomery Scott Inc., Philadelphia, Pennsylvania.
                            ---------------------

JANNEY MONTGOMERY SCOTT INC.   NEEDHAM & COMPANY, INC.

                 The date of this Prospectus is _________, 1997


<PAGE>

                          -------------------------

     "inTEST," the Company's logo on the cover of this Prospectus and the "in2"
logo are registered trademarks of inTEST Corporation. This Prospectus also
contains trademarks of other companies.

     IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
 

                                        2


<PAGE>


 



                              PROSPECTUS SUMMARY

     The following summary is qualified in its entirety by the more detailed
information and Consolidated Financial Statements and Notes thereto appearing
elsewhere in this Prospectus. Unless the context otherwise requires, all
references herein to the "Company" or "inTEST" include inTEST Corporation
("inTEST CORP") and its subsidiaries. All information in this Prospectus assumes
no exercise of the Underwriters' over-allotment option and gives effect to (i) a
stock split in the form of a stock dividend in the amount of 0.5579 shares for
every one share outstanding to be effected on the date of this Prospectus, (ii)
the termination of the Company's status as an S corporation immediately prior to
the offering and (iii) the issuance of an aggregate of 300,443 shares of Common
Stock simultaneously with the closing of the offering in exchange for the
minority interests in the Company's three foreign subsidiaries (the "Exchange").
See "The Company" and "S Corporation Distributions."


                                  The Company

     The Company is a leading independent designer, manufacturer and marketer of
docking hardware and test head manipulators, which are used with automatic test
equipment ("ATE") by semiconductor manufacturers during the testing of wafers
and packaged devices. The Company also designs and markets related ATE interface
products including high performance test sockets, interface boards and probing
assemblies. The Company's products are designed to improve the utilization and
cost-effectiveness of ATE (including testers, wafer probers and device handlers)
during the testing of linear, digital and mixed signal integrated circuits.
Since inception in 1981, the Company has developed and continues to support over
4,600 products and has been granted 13 U.S. patents for its technology.

     Testing is an integral and necessary step during the design and manufacture
of wafers and packaged devices. Each integrated circuit is tested at least twice
during the manufacturing process to ensure the functional and electrical
performance of each circuit. The increasing worldwide demand for semiconductors
in recent years has led to an increase in the demand for ATE. According to VLSI
Research Inc., in 1996 semiconductor manufacturers spent an estimated $3.7
billion on testers and $1.3 billion on wafer probers and device handlers. The
increasing complexity of wafers and packaged devices, as manifested by larger
wafers, higher speeds, growing pin counts, smaller packaged devices and greater
levels of integration has changed the design, architecture and complexity of ATE
used during the testing of such devices and has resulted in an increased demand
for the Company's products.

     The Company's docking hardware products mechanically control the intimate
interface between the test head's interface board and the prober's probing
assembly or handler's test socket. Such docking hardware facilitates the quick,
easy and safe changeover of test heads to probers or handlers, thereby allowing
semiconductor manufacturers to achieve cost savings by (i) improving ATE
utilization, (ii) improving the accuracy and integrity of test results and (iii)
reducing the need to repair or replace expensive ATE interface products. The
Company's docking hardware can be designed to be used with substantially all
makes and models of test heads, probers and handlers, and can usually be
designed to allow all ATE on a test floor to be mechanically "plug-compatible."

     The Company's in2 free-standing, floating-head universal manipulators are
designed to be used in either a dedicated or a flexible test environment and
have been engineered to hold test heads in an effectively weightless state, and
can be moved up or down, right or left, forward or backward and rotated around
each axis (six degrees of motion freedom). Consequently, an operator using no
more than 22 pounds of force can reposition a test head weighing up to
approximately 900 pounds by grasping it in his or her hands and gently moving
the test head into position to dock with a prober or handler.

     The Company's largest customers include Lucent Technologies, Motorola, SGS
Thomson and Texas Instruments among semiconductor manufacturers, and Credence
Systems, LTX and Teradyne among ATE manufacturers. The Company designs, markets
and supports its products globally both through Company account managers based
in New Jersey, Texas, California, the U.K., Singapore and Japan and through
independent sales representatives in the U.S. and abroad. The Company's
executive offices are located in Cherry Hill, New Jersey. Manufacturing
facilities are located in New Jersey and the U.K.

                                       3


<PAGE>


 


                                 The Offering


<TABLE>
<S>                                                    <C>
Common Stock offered by the Company  ...............    1,820,000 shares
Common Stock offered by the Selling Stockholders .        455,000 shares
Total offering  ....................................    2,275,000 shares
Common Stock to be outstanding after the offering .     5,911,034 shares(1)
Use of Proceeds ....................................    For working capital, general corporate
                                                        purposes and possible acquisitions. See
                                                        "Use of Proceeds."
Proposed Nasdaq National Market symbol  ............    INTT
</TABLE>


                  Summary Consolidated Financial Information
                     (in thousands, except per share data)


<TABLE>
<CAPTION>
                                                                          Years ended December 31,
                                                         ------------------------------------------------------------
                                                           1992        1993        1994        1995        1996
                                                         ----------  ----------  ----------  ----------  ----------
<S>                                                      <C>         <C>         <C>         <C>         <C>
Consolidated Statement of Earnings Data:
Revenues  .............................................   $ 6,512     $ 8,875     $ 9,287     $14,442     $18,582
Gross profit ..........................................     3,254       5,415       5,510       9,251      11,827
Operating income   ....................................       649       1,767       1,289       4,037       5,616
Earnings before income taxes and minority interest  ...   $   605     $ 1,782     $ 1,326     $ 4,070     $ 5,717
                                                          --------    --------    --------    --------    --------
Pro forma net earnings (2)  ...........................                                                   $ 3,366
Pro forma net earnings per share (2) ..................                                                   $  0.82
Pro forma weighted average shares outstanding (1)(2) .                                                      4,091



<CAPTION>
                                                         Three months ended
                                                               March 31,
                                                         -----------------------
                                                           1996       1997
                                                         ----------  ---------
<S>                                                      <C>         <C>
Consolidated Statement of Earnings Data:
Revenues  .............................................   $ 6,089     $ 3,887
Gross profit ..........................................     4,233       2,285
Operating income   ....................................     2,694       1,007
Earnings before income taxes and minority interest  ...   $ 2,706     $ 1,022
                                                          --------    --------
Pro forma net earnings (2)  ...........................               $   537
Pro forma net earnings per share (2) ..................               $  0.13
Pro forma weighted average shares outstanding (1)(2) .                  4,091
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
                                                      March 31, 1997
                                    --------------------------------------------------
                                                                      Pro forma
                                     Actual     Pro forma (3)     as adjusted (3)(4)
                                    ----------  ----------------  --------------------
<S>                                 <C>         <C>               <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents   ......   $ 2,983          $ 2,983             $18,408
Working capital ..................     3,924              560              15,985
Total assets .....................     7,492            9,115              24,540
Long term debt  ..................       148              148                 148
Total stockholders' equity  ......     4,154            2,640              18,065
</TABLE>

- ------------
(1) Includes 300,443 shares of Common Stock to be issued in the Exchange, and
    excludes 150,000 shares of Common Stock issuable upon exercise of stock
    options expected to be granted as of the date of this Prospectus at the
    initial public offering price, none of which options will then be
    exercisable. See "Management -- 1997 Stock Plan."

(2) Assumes the termination of the Company's S corporation status effective
    January 1, 1996 and the completion of the Exchange on January 1, 1996, and
    as a result reflects the amortization of goodwill associated therewith and
    the absence of a charge for the minority interest. See Note 3 of Notes to
    Consolidated Financial Statements.

(3) Reflects the acquisition of the minority interests in the Company's foreign
    subsidiaries pursuant to the Exchange, including goodwill arising from the
    Exchange, and the effects of the termination of the Company's S corporation
    status, including the distribution described under "S Corporation
    Distributions." See Note 3 of Notes to Consolidated Financial Statements.

(4) Adjusted to reflect the sale by the Company of 1,820,000 shares of Common
    Stock offered hereby at an assumed initial public offering price of $9.50
    per share and the receipt of the estimated net proceeds therefrom (after
    deducting estimated underwriting discounts and commissions and estimated
    offering expenses payable by the Company). See "Use of Proceeds" and
    "Capitalization."

                                       4


<PAGE>



                                 RISK FACTORS

     An investment in the shares of Common Stock offered hereby involves a high
degree of risk. Prospective investors should carefully consider the following
risk factors in addition to the other information set forth in this Prospectus.
This Prospectus contains certain statements of a forward-looking nature relating
to future events or the future financial performance of the Company. Prospective
investors are cautioned that such statements are only predictions and that
actual events or results may differ materially.

     Dependence upon Semiconductor Industry. The Company's business is
substantially dependent upon the level of activity and capital expenditures of
semiconductor manufacturers. The semiconductor industry is highly cyclical and
has from time to time experienced periods of excess capacity which often have
had a severely detrimental effect on the industry's demand for ATE. There can be
no assurance that the Company's business and results of operations will not be
materially adversely affected by downturns in the semiconductor industry
generally, or by downturns or changes in any one or more particular market
segments of the semiconductor industry in which the Company participates. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

     Fluctuations in Revenues and Operating Results. The Company's revenues and
operating results have fluctuated and could in the future fluctuate
significantly from period to period, including from one quarterly period to
another, due to a combination of factors, including the cyclicality of the
semiconductor industry, delays in the Company's shipments of products, the mix
of products sold, the mix of customers and the regions of the world where sales
are made in a particular period, the level of the Company's fixed costs,
cancellation or rescheduling of orders by customers and competitive pricing
pressures. In the fourth quarter of 1996, for example, the Company experienced
an operating loss substantially as a result of reduced revenues. The Company
believes such reduced revenues reflect the reduction by semiconductor
manufacturers of commitments to purchase ATE products in the second and third
quarters of 1996. The impact of these and other factors on the Company's
revenues and operating results in any future period cannot be forecast with
accuracy. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

     Importance of Patents and Proprietary Rights; Risk of Litigation. The
Company's success depends in significant part on its ability to obtain patent
protection for its proprietary technologies and to preserve its trade secrets.
The Company's U.S. issued patents will expire at various times beginning in 2002
and extending through 2015. There can be no assurance that additional patents
will be issued on the Company's pending or future applications, or that any
patents now or hereafter owned by the Company will afford protection against
competitors that develop similar technology or products. There is no certainty
that any patents issued to the Company will be held valid if subsequently
challenged or subjected to reexamination or reissue, that others will not claim
rights in the patents and other proprietary technology owned by the Company or
that the Company's efforts to protect its proprietary rights will be successful
generally or in any specific circumstance. There are no pending lawsuits or
claims against the Company regarding infringement of any existing patents or
other intellectual property rights of others.

     The Company has notified one of its competitors that the Company believes
the competitor's products infringe on one of the Company's U.S. patents. The
competitor responded by alleging that certain claims of the patent are invalid
based on an earlier issued U.S. patent. The Company, in order to strengthen its
patent position, requested reexamination of its patent by the U.S. Patent and
Trademark Office (the "PTO") over that earlier issued U.S. patent. The
competitor thereafter also requested a reexamination of the patent. A
reexamination provides the PTO with an opportunity to reevaluate the validity of
the claims of a patent previously issued by the PTO. On April 7, 1997, the PTO
issued an Office Action in Reexamination confirming five of the nine claims of
the Company's patent, and rejecting four claims. On April 29, 1997, the 
Company's patent attorney presented to the Examiner in charge of the 
Reexamination a minor amendment to the claims. In response, the Examiner agreed
that the proposed amendment appears to overcome the rejection of the four 
claims. Based on advice of its patent counsel, the Company believes that upon
formal submission of the proposed amendment, all claims will be deemed
patentable and the Commissioner of the PTO will issue a Certificate of
Reexamination to that effect. Although there can be no assurance, the Company
believes that the failure of the PTO ultimately to deem patentable some or all
of the four claims rejected in the Office Action will not have a material 
adverse effect on the Company's business or results of operations. See
"Business--Patents and Other Proprietary Rights."

                                       5


<PAGE>


     Competition. The ATE industry is highly competitive. Many of the Company's
competitors have greater financial resources and some have more extensive
engineering, manufacturing, marketing and customer support capabilities than the
Company. The Company's competitors include independent manufacturers of docking
hardware, manipulators and related ATE interface products, designers and
manufacturers of ATE and, to a lesser extent, semiconductor manufacturers'
in-house ATE interface groups. The independent manufacturers of docking hardware
and manipulators which compete with the Company include Reid-Ashman
Manufacturing of the U.S., Microhandling of Germany and Shang Sheng of Taiwan.
The manufacturers of ATE which compete with the Company in the sale of docking
hardware and manipulators include Credence Systems, LTX, Schlumberger and
Teradyne. The Company competes with numerous independent manufacturers of
related ATE interface products. The Company principally competes on the basis of
product performance and functionality, product reliability, customer service,
applications support, price and timely product delivery. There can be no
assurance that the Company's competitors will not develop competing products
that will offer performance features that are superior to the Company's
products. The Company believes that in order to remain competitive, it must
continue to commit a significant portion of its personnel, financial resources,
research and development and customer support in developing new products and in
maintaining customer satisfaction worldwide. See "Business -- Competition."

     Importance of Product Development. The market for ATE is subject to rapid
technological change and new product introductions, as well as advancing
industry standards. The development of increasingly complex semiconductors and
the utilization of semiconductors in a broader spectrum of products have driven
the need for more advanced ATE systems to test such devices at an acceptable
cost. The demand for these new ATE systems provides both the opportunity and the
need for the Company to develop additional products. There can be no assurance
that the Company will be successful in developing, manufacturing or selling new
products, that the introduction of such products will coincide with the
development of new generations of semiconductors or that such products will
satisfy customer needs or achieve market acceptance. The failure to provide
customers with new products could have a material adverse effect on the
Company's business and results of operations, as well as its customer
relationships. See "Business -- Strategy" and " -- Products."

     Acquisitions. Although the Company has not made an acquisition since 1985,
a key element of its growth strategy is to acquire businesses, technologies or
products that are complementary to those of the Company. There can be no
assurance that the Company will be able to acquire and integrate successfully
such businesses, technologies or products or that any financing which may be
necessary for such acquisitions can be obtained on favorable terms or at all.
Furthermore, the integration of an acquisition may cause a diversion of
management's time and resources. Acquisitions by the Company could result in
dilutive issuances of equity securities and additional debt and amortization
expenses related to goodwill and intangible assets. In addition, gross profit
margins of acquired products, necessary product or technology development
expenditures and other factors related to any such acquisition could result in
dilution to the Company's stockholders or have other material adverse effects on
the Company's business and results of operations. The Company is not currently a
party to any agreement or understanding with respect to any acquisition. See
"Business -- Strategy."

     International Sales and Operations. Approximately 37% and 43% of the
Company's revenues were generated by the Company's three foreign subsidiaries,
and approximately 5% and 19% of the Company's revenues were derived from sales
by inTEST CORP to customers located outside the U.S., in the first quarter of
1997 and in 1996, respectively. The Company intends to expand its international
presence and expects that international revenues will continue to represent a
significant portion of its revenues. See "Business -- Strategy." Sales to
customers outside the U.S. and operations in foreign countries are subject to
risks in addition to those incident to domestic sales and operations, including
the imposition of financial and operational governmental controls and regulatory
restrictions, the need to comply with a wide variety of U.S. and foreign import
and export laws, political and economic instability, trade restrictions, changes
in tariffs and taxes, longer payment cycles and the greater difficulty of
administering business abroad. There can be no assurance that any of these
factors will not have a material adverse effect on the Company's business or
results of operations. A significant portion of the Company's revenues is
denominated in foreign currencies, and accordingly, the Company's business and
results of operations may be affected by fluctuations in interest and currency
exchange rates. Also, the laws of certain foreign countries may not protect the
Company's intellectual property to the same extent as do the laws of the U.S.
See "Business -- Markets and Customers" and Note 4 of Notes to Consolidated
Financial Statements.

                                       6


<PAGE>


     Customer Concentration. Although the Company's largest customers generally
change from year to year, sales to the Company's top ten customers accounted for
70%, 73% and 69% of the Company's revenues in 1996, 1995 and 1994, respectively,
and sales to one customer, Lucent Technologies, accounted for 16%, 16% and 7% in
1996, 1995 and 1994, respectively. The Company sells to its customers on a
purchase order or other limited basis and not pursuant to long term contracts.
There can be no assurance that the Company will be able to retain its largest
customers or that such customers will not cancel or reschedule orders. The loss
of a major customer or a reduction in orders by major customers, including
reductions due to market or competitive conditions in the semiconductor
industry, could have a material adverse effect on the Company's business and
results of operations. See "Business -- Markets and Customers."

     Dependence on Key Suppliers. The Company relies on third party suppliers,
fabricators, finishers and manufacturers (collectively, "Suppliers") in the
production of its products. Although the Company believes that all raw materials
and component parts are currently available in adequate amounts, there can be no
assurance that shortages will not develop in the future. Certain of the raw
materials and component parts for the Company's docking hardware and manipulator
products are purchased from single Suppliers, and certain of the Company's
docking hardware and manipulator products are fabricated by single fabricators
and finished by single finishers. The related ATE interface products sold by the
Company are manufactured to the Company's specifications by third party
fabricators, finishers and manufacturers, and certain of those products are
purchased from single Suppliers. The Company does not have written agreements
with such Suppliers. Although the Company believes there are alternative
Suppliers for all such products, a termination or significant disruption of any
of its existing supplier arrangements could have a material adverse effect on
the Company's business and results of operations. See "Business -- Manufacturing
and Supply."

     Dependence on Key Personnel. The loss of any one or more of the key
technical staff or managers of the Company could have a material adverse effect
on the Company's business and results of operations. Due to the importance of
long term relationships generally in Japan, the loss of any key employee of the
Company's Japanese subsidiary could have similar adverse consequences on the
Company's Japanese operations. From time to time, there is intense competition
for qualified employees among companies in the ATE industry, academic
institutions and other businesses. The Company does not have written employment
agreements with any of its executive officers or other key employees, nor does
the Company maintain key-person life insurance on any of its employees. There
can be no assurance that the Company will be successful in hiring or retaining
qualified personnel, and the inability to attract and motivate highly skilled
employees could have a material adverse effect on the Company's business and
results of operations. See "Business -- Strategy," " -- Employees" and
"Management."

     Control by Principal Stockholders. Upon completion of the offering, the
Company's Chairman and Chief Executive Officer, Alyn R. Holt, and all of the
executive officers and directors of the Company, collectively, will beneficially
own approximately 31% and 50%, respectively, of the Common Stock (28% and 45%,
respectively, if the over-allotment option is exercised in full). Existing
management will hold sufficient voting power to enable it to continue to exert
significant influence over the business and affairs of the Company for the
foreseeable future. Such concentration of control of the Company may also have
the effect of discouraging bids for the Common Stock at a premium over the
market price and may have a material adverse effect on the market price of the
Common Stock. See "Principal and Selling Stockholders."

     Broad Management Discretion as to Use of Proceeds. The net proceeds of the
offering will be used for working capital, general corporate purposes and
possible acquisitions of businesses, technologies or products complementary to
the Company's business. If the Company were to make any such acquisition, it
might use a significant portion of the net proceeds in connection with such
acquisition. The Company currently has no specific agreements or plans with
respect to such acquisitions, and there can be no assurance the Company will
consummate any acquisition. Accordingly, the Company's management will retain
broad discretion as to the allocation of a significant portion of the net
proceeds from the offering. See "Use of Proceeds" and "Business -- Strategy."

     Anti-Takeover Protection. Certain provisions of the Company's Certificate
of Incorporation and of Delaware law could discourage potential acquisition
proposals and could delay or prevent a change in control of the Company. Such
provisions could diminish the opportunities for a stockholder to participate in
tender offers, including those at a premium over the market price of the Common
Stock. Such provisions may also inhibit

                                       7


<PAGE>

increases in the market price of the Common Stock that could result from
takeover attempts. In addition, the Board of Directors, without further
stockholder approval, may issue Preferred Stock that could have the effect of
delaying, deterring or preventing a change in control of the Company. The
issuance of Preferred Stock could also have a material adverse effect on the
voting power of the holders of Common Stock, including the loss of voting
control to others. The Company has no present plans to issue any Preferred
Stock. See "Description of Capital Stock -- Preferred Stock" and " -- Certain
Corporate Provisions."

     No Prior Public Market; Possible Volatility of Stock Price; Dilution. Prior
to the offering, there has been no public market for the Common Stock, and there
can be no assurance that an active public market for the Common Stock will
develop or be sustained after the offering. The initial public offering price
was determined through negotiations between the Company and the representatives
of the Underwriters (the "Representatives") based on several factors and may not
be indicative of the market price of the Common Stock after the offering. See
"Underwriting." The trading price of the Company's Common Stock could be subject
to wide fluctuations in response to quarterly variations in the Company's
operating results, announcements of technological innovations or new products by
the Company or its competitors, developments concerning patents or proprietary
rights or other events or factors. The stock market has experienced extreme
price and volume fluctuations which have particularly affected the market prices
of many technology companies and small capitalization stocks in particular, and
which have often been unrelated to the operating performance of these companies.
These broad market fluctuations, as well as general economic and political
conditions, may have an unfavorable effect on the market price of the Common
Stock. Purchasers of the Common Stock offered hereby will experience immediate
and substantial dilution in net tangible book value of the Common Stock. See
"Dilution."

     Shares Eligible for Future Sale. The sale of a substantial number of shares
of Common Stock, or the perception that such sales could occur, could have a
material adverse effect on prevailing market prices for the Common Stock. In
addition, any such sale or such perception could make it more difficult for the
Company to sell equity securities or equity-related securities in the future at
a time and price that the Company deems appropriate. Upon consummation of the
offering, the Company will have a total of 5,911,034 shares of Common Stock
outstanding, of which the 2,275,000 shares offered hereby will be eligible for
immediate sale in the public market without restriction, unless they are held by
"affiliates" of the Company within the meaning of Rule 144 under the Securities
Act of 1933, as amended (the "Securities Act"). The remaining 3,636,034 shares
will be "restricted" securities within the meaning of Rule 144 under the
Securities Act and will be eligible for public sale thereunder subject to volume
limitations and other conditions of Rule 144, if applicable. As of the date of
this Prospectus, the Company and the holders of all of its Common Stock have
agreed that they will not sell any shares of Common Stock or related securities
of the Company without the prior written consent of Janney Montgomery Scott
Inc., for a period of 180 days from the date of this Prospectus. Upon expiration
of such 180 day period, 297,841 of the currently outstanding restricted shares
will be eligible for public sale under Rule 144 without any volume or other
limitations. No prediction can be made as to the effect, if any, that future
sales of Common Stock, or the availability of Common Stock for future sale, will
have on the market price of the Common Stock from time to time or the Company's
ability to raise capital through an offering of its equity securities. In
addition, the Company plans to file a registration statement within 185 days of
the date of this Prospectus to permit the sale of up to 500,000 shares of Common
Stock which may be issued to employees in the future pursuant to the Company's
1997 Stock Plan. See "Management -- 1997 Stock Plan" and "Shares Eligible for
Future Sale."

                                       8


<PAGE>



                                  THE COMPANY

     The Company was incorporated in New Jersey in 1981 and reincorporated in
Delaware in April 1997. The Company has three foreign subsidiaries: inTEST
Limited ("inTEST LTD"), a British corporation located in Thame, England, U.K.;
inTEST Kabushiki Kaisha ("inTEST KK"), a Japanese corporation located in
Kichijoji, Japan; and inTEST PTE, Limited ("inTEST PTE"), a Singapore
corporation located in Singapore. The Company maintains its headquarters at 2
Pin Oak Lane, Cherry Hill, New Jersey 08003. The Company's telephone number is
(609) 424-6886 and its Internet e-mail address is postmaster@intest.com.

     The Company and the minority stockholders of each of the Company's foreign
subsidiaries have agreed that simultaneous with the closing of the offering, the
Company will acquire the minority interests in each of the three foreign
subsidiaries by means of the Exchange, pursuant to which the Company will issue
shares of its Common Stock in exchange for the shares of stock of each foreign
subsidiary held by the minority stockholders. The agreed upon exchange ratio for
the minority interests is based on the average percentage contribution of each
subsidiary to the Company's consolidated earnings before interest and taxes for
the three most recent years. Alyn R. Holt, the Company's Chairman and Chief
Executive Officer, will receive a total of 48,487 shares of the Company's Common
Stock in exchange for his shares of stock in the foreign subsidiaries. Mr. Holt
is the only director, officer or stockholder of inTEST CORP who owns shares of
common stock in any of the foreign subsidiaries. Each of the minority
stockholders of the foreign subsidiaries, including Mr. Holt, will receive
shares of the Company's Common Stock based upon the same exchange ratio. See
"Principal and Selling Stockholders."


                                USE OF PROCEEDS

     The proceeds to be received by the Company from the sale of the Common
Stock offered hereby (net of estimated underwriting discounts and commissions
and offering expenses) will be approximately $15.4 million, assuming an initial
public offering price of $9.50 per share. The Company will not receive any
proceeds from the sale of shares of Common Stock by the Selling Stockholders.

     The proceeds will be used for working capital, general corporate purposes
and possible acquisitions of businesses, technologies or products complementary
to the Company's business. A key element of the Company's growth strategy is to
seek to acquire businesses, technologies or products involving one or more of
the many ATE interface products related to its principal docking hardware and
manipulator product lines. If the Company were to make any such acquisition, it
might use a significant portion of the net proceeds or incur additional
indebtedness in connection with such acquisition. At the present time the
Company has no specific agreements or plans with respect to such acquisitions,
and there can be no assurance the Company will consummate any acquisition. See
"Business -- Strategy."

     Pending use as set forth above, the Company intends to invest the proceeds
in investment-grade, short term, interest-bearing securities or shares of
investment companies investing primarily in such securities.

                                       9


<PAGE>


                          S CORPORATION DISTRIBUTIONS

     Prior to the offering, the Company has been a corporation subject to
taxation under Subchapter S of the Internal Revenue Code of 1986, as amended. As
a result, the net earnings of the Company have been taxed, for Federal and
certain New Jersey state income tax purposes, as income of the Company's
stockholders, and the Company periodically paid dividends to its stockholders in
amounts exceeding such stockholders' liabilities for taxes.

     The Company will terminate its S corporation status prior to the sale of
the Common Stock offered hereby (the "Termination Date") and distribute to its
current stockholders a final amount representing the Company's previously taxed
but undistributed S corporation earnings through the Termination Date. The
amount of the final distribution would have been approximately $3.4 million if
the Termination Date had been March 31, 1997, but the amount distributed will
include the Company's actual taxable income through the Termination Date, less
distributions to stockholders during that time period. Purchasers of shares of
Common Stock in the offering will not receive any portion of the S corporation
distribution. The Company believes it will have, exclusive of the proceeds of
the offering, cash and cash equivalents in excess of the amount necessary to pay
the final S corporation distribution following the Termination Date.


                                DIVIDEND POLICY

     The Company does not anticipate paying cash dividends in the foreseeable
future, but intends to retain future earnings, if any, for reinvestment in the
operation and expansion of the Company's business. Any determination to pay cash
dividends will be at the discretion of the Board of Directors and will be
dependent upon the Company's financial condition, results of operations, capital
requirements and such other factors as the Board of Directors deems relevant.

                                       10


<PAGE>



                                CAPITALIZATION

     The following table sets forth (i) the capitalization of the Company at
March 31, 1997, (ii) the pro forma capitalization at that date reflecting both
the issuance of an aggregate of 300,443 shares of Common Stock in the Exchange
and the termination of the Company's S corporation status and (iii) the
capitalization as adjusted at that date to give effect to the pro forma
adjustments described above, the sale of the 1,820,000 shares of Common Stock
offered by the Company hereby at an assumed initial public offering price of
$9.50 per share and the receipt of the estimated net proceeds therefrom. This
table should be read in conjunction with the Consolidated Financial Statements
and Notes thereto included elsewhere in this Prospectus.


<TABLE>
<CAPTION>
                                                                                   March 31, 1997
                                                                      ----------------------------------------
                                                                                   (in thousands)
                                                                                                   Pro forma
                                                                        Actual      Pro forma     as adjusted
                                                                      --------     -----------    ------------
<S>                                                                   <C>         <C>            <C>
Long term debt  ...................................................    $    148      $   148       $    148
                                                                        --------      --------      --------
Stockholders' equity:
 Preferred stock, $0.01 par value; 5,000,000 shares authorized; no
   shares issued or outstanding  ..................................          --           --             --
 Common stock, $0.01 par value; 20,000,000 shares authorized;
   3,790,591 shares issued and outstanding actual, 4,091,034 shares
   issued and outstanding pro forma and 5,911,034 shares issued and
   outstanding pro forma as adjusted   ............................          38           41             59
 Additional paid-in capital .......................................         689        2,544         17,951
 Retained earnings ................................................       3,461           89             89
 Foreign currency translation adjustment   ........................         (34)         (34)           (34)
                                                                        --------      --------      --------
 Total stockholders' equity .......................................       4,154        2,640         18,065
                                                                        --------      --------      --------
 Total capitalization .............................................    $  4,302      $ 2,788       $ 18,213
                                                                        ========       ========     ========
</TABLE>




                                       11


<PAGE>


                                   DILUTION

     At March 31, 1997, the pro forma net tangible book value of the Company was
$1,073,000 or $0.26 per share of Common Stock. Pro forma net tangible book value
per share represents total assets less intangible assets, less total
liabilities, divided by the number of shares of Common Stock outstanding at that
date after giving effect to the Exchange. After giving effect to the receipt of
the net proceeds from the sale of the 1,820,000 shares of Common Stock offered
by the Company hereby at an assumed initial public offering price of $9.50 per
share, and after deducting underwriting discounts and estimated offering
expenses, the pro forma net tangible book value as of March 31, 1997 would have
been $16,498,000 or $2.79 per share of Common Stock. This represents an
immediate increase in net tangible book value of $2.53 per share to existing
stockholders and an immediate dilution of $6.71 per share to new investors
purchasing the shares of Common Stock offered hereby. The following table
illustrates this dilution on a per share basis:


<TABLE>
<S>                                                                        <C>        <C>
 Assumed initial public offering price per share   .....................               $ 9.50
   Pro forma net tangible book value per share before the offering  ....    $ 0.26
   Increase per share attributable to new investors  ...................      2.53
                                                                           --------
 Pro forma net tangible book value per share after the offering   ......                 2.79
                                                                                      --------
 Dilution per share to new investors   .................................               $ 6.71
                                                                                      ========
</TABLE>


     The following table sets forth, as of March 31, 1997, and after giving
effect to the Exchange and the offering, the difference between existing
stockholders and new investors with respect to the number of shares of Common
Stock purchased from the Company (but not those purchased from the Selling
Stockholders), the total cash consideration paid and the average price per
share.


<TABLE>
<CAPTION>
                                                                                       
                                     Shares Purchased           Cash Consideration         Average
                                -------------------------   --------------------------      Price
                                   Number        Percent       Amount        Percent      Per Share
                                ------------   ----------   -------------   ----------   -----------
<S>                             <C>            <C>          <C>             <C>          <C>
Existing stockholders  ......     4,091,034        69.2%    $ 1,173,000         6.3%         $0.29
New investors ...............     1,820,000        30.8      17,290,000        93.7           9.50
                                 -----------    -------     ------------    -------         -------
 Total(1)  ..................     5,911,034       100.0%    $18,463,000       100.0%
                                 ===========    =======     ============    =======
</TABLE>


- ------------

(1) Sales by the Selling Stockholders in the offering will reduce the number of
    shares held by existing stockholders to 3,636,034 or 61.5% of the total
    number of shares of Common Stock outstanding after the offering (3,294,784
    and 55.7% if the Underwriters' over-allotment option is exercised in full),
    and will increase the number of shares held by new investors to 2,275,000 or
    38.5% of the total number of shares of Common Stock outstanding after the
    offering (2,616,250 and 44.3% if the Underwriters' over-allotment is
    exercised in full).


                                       12


<PAGE>



                      SELECTED CONSOLIDATED FINANCIAL DATA

     The following table contains certain selected consolidated financial data
of the Company and is qualified by the more detailed Consolidated Financial
Statements and Notes thereto included elsewhere in this Prospectus. The
consolidated statement of earnings data for the years ended December 31, 1992,
1993, 1994, 1995 and 1996 and the consolidated balance sheet data as of December
31, 1992, 1993, 1994, 1995 and 1996 have been derived from the Consolidated
Financial Statements of the Company which have been audited by KPMG Peat Marwick
LLP, independent certified public accountants, as indicated in their report
included elsewhere in this Prospectus. The consolidated statement of earnings
data for the three months ended March 31, 1996 and 1997 and the consolidated
balance sheet data as of March 31, 1996 and 1997 are derived from unaudited
financial statements. The unaudited financial statements include all adjustments
(consisting only of normal recurring adjustments) that the Company considers
necessary for a fair presentation of the results of operations for such periods.
The following data should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the
Consolidated Financial Statements and Notes thereto and other financial
information included elsewhere in this Prospectus.


<TABLE>
<CAPTION>
                                                             Years ended December 31,
                                                        ----------------------------------
                                                          1992        1993        1994
                                                        ----------  ----------  ----------
                                                         (in thousands, except per share
                                                                       data)
<S>                                                     <C>         <C>         <C>
Consolidated Statement of Earnings Data:
Revenues .............................................    $  6,512    $  8,875    $  9,287
Cost of revenues  ....................................       3,258       3,460       3,777
                                                           --------    --------    --------
Gross profit   .......................................       3,254       5,415       5,510
Operating expenses:
 Selling expense  ....................................       1,027       1,466       1,491
 Research and development expense   ..................         750         953       1,623
 General and administrative expense ..................         828       1,229       1,107
                                                           --------    --------    --------
Total operating expenses   ...........................       2,605       3,648       4,221
                                                           --------    --------    --------
Operating income  ....................................         649       1,767       1,289
Other income (expense):
 Interest income  ....................................          23          20          22
 Interest expense ....................................         (50)        (40)         (9)
 Other   .............................................         (17)         35          24
                                                           --------    --------    --------
 Total other income (expense)    .....................         (44)         15          37
                                                           --------    --------    --------
Earnings before income taxes and minority interest ...         605       1,782       1,326
Income tax expense   .................................         103         254         382
                                                           --------    --------    --------
Earnings before minority interest   ..................         502       1,528         944
Minority interest ....................................         (36)        (64)       (127)
                                                           --------    --------    --------
Net earnings   .......................................    $    466    $  1,464    $    817
                                                           ========    ========    ========
Pro forma net earnings (1) ...........................
Pro forma net earnings per share (1)   ...............
Pro forma weighted average shares outstanding (1)  ...
</TABLE>




<PAGE>

<TABLE>
<CAPTION>
                                                                                    Three months ended
                                                        Years ended December 31,          March 31,
                                                        ------------------------    ------------------
                                                          1995          1996         1996      1997
                                                        ----------  ------------    -------  ---------
                                                            (in thousands, except per share data)
<S>                                                     <C>         <C>         <C>         <C>
Consolidated Statement of Earnings Data:
Revenues .............................................    $ 14,442    $ 18,582    $  6,089   $ 3,887
Cost of revenues  ....................................       5,191       6,755       1,856     1,602
                                                           --------    --------    --------  --------
Gross profit   .......................................       9,251      11,827       4,233     2,285
Operating expenses:
 Selling expense  ....................................       2,118       2,471         781       493
 Research and development expense   ..................       1,930       1,928         394       374
 General and administrative expense ..................       1,166       1,812         364       411
                                                           --------    --------    --------  --------
Total operating expenses   ...........................       5,214       6,211       1,539     1,278
                                                           --------    --------    --------  --------
Operating income  ....................................       4,037       5,616       2,694     1,007
Other income (expense):
 Interest income  ....................................          82         147          23        29
 Interest expense ....................................          --         (11)         (5)       (4)
 Other   .............................................         (49)        (35)         (6)      (10)
                                                           --------    --------    --------  --------
 Total other income (expense)    .....................          33         101          12        15
                                                           --------    --------    --------  --------
Earnings before income taxes and minority interest ...       4,070       5,717       2,706     1,022
Income tax expense   .................................         637         858         355       167
                                                           --------    --------    --------  --------
Earnings before minority interest   ..................       3,433       4,859       2,351       855
Minority interest ....................................        (181)       (213)        (94)      (11)
                                                           --------    --------    --------  --------
Net earnings   .......................................    $  3,252    $  4,646    $  2,257   $   844
                                                           ========    ========    ========  ========
Pro forma net earnings (1) ...........................                $  3,366               $   537
Pro forma net earnings per share (1)   ...............                $   0.82               $  0.13
Pro forma weighted average shares outstanding (1)  ...                   4,091                 4,091
</TABLE>



<TABLE>
<CAPTION>
                                                                                                         Three months ended
                                                        Years ended December 31,                            March 31, 1997
                                     --------------------------------------------------------------   ------------------------
                                                                                                                     Pro
                                        1992         1993         1994         1995         1996        Actual       forma (2)
                                     ----------   ----------   ----------   ----------   ----------   ----------   -----------
                                                                          (in thousands)
<S>                                  <C>          <C>          <C>          <C>          <C>          <C>          <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents   ......    $   943      $ 1,034      $ 1,336      $ 1,919      $ 3,692      $ 2,983      $ 2,983
Working capital ..................      1,526        2,546        2,944        4,201        4,377        3,924          560
Total assets .....................      2,976        3,675        4,624        6,352        7,716        7,492        9,115
Long term debt  ..................         --           --           --           --          155          148          148
Total stockholders' equity  ......      1,436        2,448        2,765        4,048        4,587        4,154        2,640
</TABLE>


- ------------

(1) Assumes the termination of the Company's S corporation status effective
    January 1, 1996 and the completion of the Exchange on January 1, 1996, and
    as a result reflects the amortization of goodwill associated therewith and
    the absence of a charge for the minority interest. See Note 3 of Notes to
    Consolidated Financial Statements.
(2) Reflects the acquisition of the minority interests in the Company's foreign
    subsidiaries pursuant to the Exchange, including goodwill arising from the
    Exchange, and the effects of the termination of the Company's S corporation
    status, including the distribution described under "S Corporation
    Distributions." See Note 3 of Notes to Consolidated Financial Statements.

                                       13


<PAGE>



                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

     The Company was founded in 1981 to design and develop docking hardware,
test head manipulators and related ATE interface products. In 1982, the Company
introduced its first docking hardware and the in2 test head manipulator. The
Company has designed more than 4,600 products since its inception, and believes
that its products have been purchased by most major semiconductor manufacturers.
A significant majority of the Company's revenues for the 15 months ended March
31, 1997 was derived from sales of its docking hardware and manipulator
products, and the remainder was derived from sales of related ATE interface
products.

     The Company's revenues have fluctuated generally as a result of cyclicality
in the semiconductor manufacturing industry. The Company believes that purchases
of the Company's docking hardware and manipulators are typically made from its
customers' capital expenditure budgets, while related ATE interface products,
which must be replaced periodically, are typically made from its customers'
operating budgets. When semiconductor manufacturing activity generally slowed
during much of 1996, many semiconductor manufacturers reduced their capital
expenditure budgets and, correspondingly, postponed or cancelled orders for ATE
and related equipment. As a result, starting in the second quarter of 1996
through the fourth quarter of 1996, the Company's orders for and sales of
docking hardware and manipulators declined substantially. During this same
period, orders for and sales of related ATE interface products also declined,
but to a lesser extent. Although the Company experienced increased orders for
and sales of all of its products in the first quarter of 1997 compared to the
fourth quarter of 1996, the Company's revenues were substantially below the
record high revenues realized in the first quarter of 1996.

     The Company sells to semiconductor manufacturers and ATE manufacturers
either through inTEST account managers or through independent sales
representatives. The mix of customers during any given period may affect the
Company's gross margin due to the difference in accounting for sales discounts
and commissions. Specifically, sales discounts, typical in sales by inTEST
account managers to ATE manufacturers worldwide, are a direct reduction of
revenue and have the effect of reducing gross margin. In contrast, trade
discounts offered on sales to semiconductor manufacturers, while also a
reduction in revenue, are generally lower than sales discounts to ATE
manufacturers and accordingly have less impact on gross margin. Additionally,
commissions paid to independent sales representatives on sales to semiconductor
manufacturers in North America and Southeast Asia are charged to selling expense
and do not affect gross margin. Consequently, the relative mix of customers for
the Company's products and the region of the world where sales are made have
affected and will affect the Company's gross margin and selling expense.
Operating income, however, has not been materially affected by the foregoing
factors, because commissions paid to independent sales representatives plus
trade discounts on sales to semiconductor manufacturers are approximately equal
to the sales discounts given on sales to ATE manufacturers. See "Business --
Sales and Distribution."

     The Company believes that the ultimate destination of a significant
majority of its products is outside the U.S. Approximately 37%, 43%, 49% and 54%
of the Company's revenues for the three months ended March 31, 1997 and the
years ended December 31, 1996, 1995 and 1994, respectively, were derived from
sales by the Company's three foreign subsidiaries. Approximately 5%, 19%, 19%
and 6% of the Company's revenues for the three months ended March 31, 1997 and
the years ended December 31, 1996, 1995 and 1994, respectively, were derived
from sales by inTEST CORP which were shipped to customer locations outside the
U.S. Although the Company has exposure to foreign currency fluctuations as a
result of its foreign operations, it believes its exposure to foreign currency
fluctuations is not significant. Foreign currency transaction gains and losses
were ($31,000), ($43,000) and $25,000 in 1996, 1995 and 1994, respectively. The
minority interest shown in the Company's Consolidated Financial Statements
reflects the approximately 21% interest in each of the Company's three foreign
subsidiaries which are to be acquired upon the closing of the offering pursuant
to the Exchange.

     Prior to the offering, the Company and its stockholders elected to be
treated as an S corporation for Federal and New Jersey state income tax
purposes. Accordingly, while the Company's Consolidated Financial Statements
reflect income tax expense related to its foreign operations and certain state
income taxes, they do not include a provision for Federal income tax expense. In
connection with the offering, the Company will terminate

                                       14


<PAGE>

its S corporation status and will become subject to Federal and additional New
Jersey state income taxes in future years. Management anticipates that the
Company's prospective effective tax rate will approximate 40%, although this
rate could fluctuate from period-to-period depending on the mix of domestic and
foreign earnings, the availability of foreign tax credits and on other factors.
The Company will also begin to provide for deferred income taxes in future
periods, although no provision will be made for foreign earnings intended to be
permanently invested abroad, which approximate $1.0 million at March 31, 1997.
The Company believes the effect of such additional taxes on the Company's
liquidity will be more than offset by the elimination of the Company's practice,
as an S corporation, of distributing dividends to its stockholders. Such
dividends totaled 88%, 61% and 79% of the Company's net earnings in 1996, 1995
and 1994, respectively.

Results of Operations

     The following table sets forth, for the periods indicated, the percentage
of the Company's revenues represented by certain line items of its Consolidated
Statements of Earnings:


<TABLE>
<CAPTION>
                                                                                                  Three months ended
                                                               Years ended December 31,                 March 31,
                                                        ------------------------------------   ------------------------
                                                            1994         1995         1996         1996          1997
                                                        ----------   ----------   ----------   ----------   -----------
<S>                                                     <C>          <C>          <C>          <C>          <C>
Revenues   ..........................................       100.0%       100.0%       100.0%       100.0%        100.0%
Cost of revenues ....................................        40.7         35.9         36.4         30.5          41.2
                                                         --------     --------     --------     --------      --------
Gross margin  .......................................        59.3         64.1         63.6         69.5          58.8
Operating expenses:
 Selling expense ....................................        16.0         14.6         13.3         12.8          12.7
 Research and development expense  ..................        17.5         13.4         10.4          6.5           9.6
 General and administrative expense   ...............        11.9          8.1          9.7          6.0          10.6
                                                         --------     --------     --------     --------      --------
 Total operating expenses ...........................        45.4         36.1         33.4         25.3          32.9
                                                         --------     --------     --------     --------      --------
Operating income ....................................        13.9         28.0         30.2         44.2          25.9
Other income  .......................................         0.4          0.2          0.5          0.2           0.4
                                                         --------     --------     --------     --------      --------
Earnings before income taxes and minority interest .         14.3         28.2         30.7         44.4          26.3
Income tax expense  .................................         4.1          4.4          4.6          5.8           4.3
Minority interest   .................................        (1.4)        (1.3)        (1.1)        (1.5)         (0.3)
                                                         --------     --------     --------     --------      --------
Net earnings  .......................................         8.8%        22.5%        25.0%        37.1%         21.7%
                                                         ========     ========     ========     ========      ========
</TABLE>


Three Months Ended March 31, 1997 Compared to Three Months Ended March 31, 1996

     Revenues. Revenues were $3.9 million for the first quarter of 1997 compared
to a record $6.1 million for the same period in 1996, a decrease of $2.2 million
or 36%. The substantial fluctuation in revenues followed the cyclicality of the
semiconductor industry during the same periods. Revenues for the first quarter
of 1996 reflected an increased level of capital expenditures in the
semiconductor industry, which was followed by a general decline in such
expenditures during much of the balance of 1996. Revenues for the first quarter
of 1997, although down from the first quarter of 1996, indicate an increase in
commitments for capital expenditures which began in the industry at the end of
1996. As a result, revenues for the first quarter of 1997 exceeded revenues for
the fourth quarter of 1996 by 46% or $1.2 million, and the Company's backlog
increased from $1.8 million at December 31, 1996 to $2.3 million at March 31,
1997.

     Gross Margin. Gross margin declined to 59% for the first quarter of 1997
from 70% for the same period in 1996. The decrease was principally attributable
to the fact that sales to ATE manufacturers generated approximately one-third of
the Company's revenues in the first quarter of 1997 compared to approximately
one-fifth in the first quarter of 1996. The Company believes that this shift in
customer mix is not indicative of a trend. The reduced gross margin also
reflects higher incremental material costs, due to lower manufacturing levels,
and higher fixed costs (principally rent, depreciation and salaries) for the
first quarter of 1997 compared to the same period in 1996.

                                       15


<PAGE>


     Selling Expense. Selling expense was $0.5 million for the first quarter of
1997 compared to $0.8 million for the same period in 1996, a decrease of $0.3
million or 37%. The decrease was due principally to a decrease in commissions
and other variable expenses associated with lower sales activity, as well as a
lower percentage of revenues from commission sales to semiconductor
manufacturers.

     Research and Development Expense. Research and development expense was $0.4
million for the first quarter of both 1997 and 1996. The primary component of
research and development expense is compensation, which did not change
materially for the first quarter of 1997 compared to the same period in 1996.
Most of the Company's technical staff are engaged in both research and
development and sales functions.

     General and Administrative Expense. General and administrative expense was
$0.4 million for the first quarter of both 1997 and 1996. The primary component
of general and administrative expense is compensation, which did not change
materially for the first quarter of 1997 compared to the same period in 1996.

     Income Tax Expense. As an S corporation, net earnings are taxed as income
to the Company's stockholders for Federal income tax. However, income tax
expense includes certain state income taxes and taxes imposed by foreign
jurisdictions. Income tax expense decreased to $0.2 million for the first
quarter of 1997 from $0.4 million for the same period in 1996, a decrease of
$0.2 million or 53%, primarily as a result of reduced operating income on lower
revenues, offset by an increase in the Company's effective tax rate. The
Company's effective tax rate was 16% for the first quarter of 1997 compared to
13% for the same period in 1996. The increase in the effective tax rate was
caused primarily by a greater percentage of earnings before income taxes and
minority interest being attributable to the Company's foreign subsidiaries.

1996 Compared to 1995

     Revenues. Revenues were $18.6 million for 1996 compared to $14.4 million
for 1995, an increase of $4.2 million or 29%. The increase was due to the higher
levels of shipments of the Company's products during the first nine months of
1996, which were based on orders placed by semiconductor manufacturers during
late 1995 and early 1996. The Company did not increase sales prices
significantly in 1996. The Company believes that more than half of the Company's
increased revenues was from sales of products used in the testing of mixed
signal devices, and the balance was from sales of products used in the testing
of digital devices, such as microprocessors and microcontrollers, and numerous
other devices used in the automotive, computer, telecommunications and other
industries.

     Gross Margin. Gross margin remained constant at 64% for both 1996 and 1995.
The percentage of the Company's revenues derived from sales to ATE manufacturers
increased by 8% in 1996 compared to 1995, which had the effect of reducing gross
margin for 1996. The reduction in gross margin was offset by the improved
absorption of fixed costs over the higher revenue base and reduced incremental
material costs due to volume discounts received in the first two quarters of
1996.

     Selling Expense. Selling expense was $2.5 million for 1996 compared to $2.1
million for 1995, an increase of $0.4 million or 17%. The increase was
attributable to increased variable costs associated with higher sales activity
in 1996. Selling expense as a percentage of revenues decreased in 1996 compared
to 1995 because of an increase in non-commission sales as a percentage of
revenues. Salaries associated with sales activities were the same for 1996 as
for 1995, as management elected not to expand its sales staff in anticipation of
third and fourth quarter reductions in capital expenditures by semiconductor
manufacturers.

     Research and Development Expense. Research and development expense was $1.9
million for both 1996 and 1995. Compensation expense incurred in research and
development activities for 1996 increased $0.2 million or 22% over 1995 due to
an increase in staffing levels and associated costs. The increase was offset by
a $0.2 million or 45% decrease in amounts spent for materials.

     General and Administrative Expense. General and administrative expense was
$1.8 million for 1996 compared to $1.2 million for 1995, an increase of $0.6
million or 55%. The majority of the increase was attributable to additional
compensation and costs associated with newly hired staff in accounting, MIS and
finance functions and salary increases of other administrative personnel.

                                       16


<PAGE>


     Income Tax Expense. The Company's effective tax rate decreased slightly in
1996 to 15% compared to 16% for 1995 due principally to a decrease in the
contribution of earnings before income taxes and minority interest from the
Company's foreign subsidiaries.

1995 Compared to 1994

     Revenues. Revenues were $14.4 million for 1995 compared to $9.3 million for
1994, an increase of $5.1 million or 56%. The increase was due to the higher
levels of shipments of the Company's products throughout 1995, reflecting
increased demand as semiconductor manufacturers expanded manufacturing capacity
in excess of historical rates. The increase in revenues was principally related
to volume increases as the Company did not increase sales prices significantly
in 1995. As in 1996, the Company believes the increase in revenues was
attributable to increased sales of products used during the testing of complex
integrated circuits.

     Gross Margin. Gross margin was 64% for 1995 compared to 59% for 1994, an
increase of 5%. The improvement in gross margin was primarily the result of
lower incremental material costs due to increased purchasing volume, improved
overhead absorption of fixed costs over the higher revenue base and a 10%
reduction in the percentage of revenues derived from sales to ATE manufacturers.

     Selling Expense. Selling expense was $2.1 million for 1995 compared to $1.5
million for 1994, an increase of $0.6 million or 42%. The increase was
attributable to increased variable costs associated with the increase in
revenues for 1995 primarily including commissions on sales to semiconductor
manufacturers by independent sales representatives which increased $0.2 million
or 53%. Salaries associated with sales activities also increased $0.2 million or
56% due to the hiring of additional staff in 1995.

     Research and Development Expense. Research and development expense was $1.9
million for 1995 compared to $1.6 million for 1994, an increase of $0.3 million
or 19%. Compensation expense incurred in research and development activities for
1995 increased $0.1 million or 12% due primarily to salary increases. In
addition, amounts spent for materials increased $0.2 million or 63%.

     General and Administrative Expense. General and administrative expense was
$1.2 million for 1995 compared to $1.1 million for 1994, an increase of $0.1
million or 5%, resulting primarily from increased professional expenses related
to patent applications in Europe and Asia and consulting fees.

     Income Tax Expense. The Company's effective tax rate declined significantly
in 1995 to 16% compared to 29% for 1994. The decrease was a function of a
significantly greater percentage of earnings before income tax and minority
interest being attributable to the Company's domestic operations in 1995 (65%)
compared to 1994 (26%).

Quarterly Results of Operations

     The following tables present certain unaudited consolidated quarterly
financial information for each of the nine quarters ended March 31, 1997. In the
opinion of the Company's management, this quarterly information has been
prepared on the same basis as the Consolidated Financial Statements set forth
elsewhere in this Prospectus and includes all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the information for
the periods presented when read in conjunction with the Consolidated Financial
Statements and Notes thereto. The results of operations for any quarter are not
necessarily indicative of results for the full year or for any future period.

     The Company's business is not seasonal, therefore year-over-year quarterly
comparisons of the Company's results of operations may not be as meaningful as
the sequential quarterly comparisons set forth below which tend to reflect the
cyclical activity of the semiconductor industry as a whole. Quarterly
fluctuations in expenses either are related directly to sales activity and
volume, or tend to be a function of personnel costs and the timing of expenses
incurred throughout a year. See "Risk Factors -- Fluctuations in Revenues and
Operating Results."

                                       17


<PAGE>



<TABLE>
<CAPTION>
                                                             Three months ended
                                             ---------------------------------------------------
                                              Mar. 31,    June 30,     Sept. 30,     Dec. 31,
                                               1995         1995         1995         1995
                                             -----------  -----------  ------------  -----------
                                                              (in thousands)
<S>                                         <C>          <C>          <C>           <C>
Consolidated Statement of Earnings Data:
Revenues .................................  $  3,158      $ 3,094     $   3,867     $  4,323
Cost of revenues  ........................     1,441        1,225         1,479        1,046
                                             --------       -------    ---------     --------
Gross profit   ...........................     1,771        1,869         2,388        3,277
                                             --------       -------    ---------     --------
Operating expenses:
 Selling expense  ........................       313          411           576          818
 Research and development expense   ......       360          415           491          664
 General and administrative expense ......       205          286           216          459
                                             --------       -------    ---------     --------
 Total operating expenses  ...............       878        1,112         1,283        1,941
                                             --------       -------    ---------     --------
Operating income (loss) ..................       839          757         1,105        1,336
Other income (expense)  ..................        15           35           (24)           7
                                             --------       -------    ---------     --------
Earnings (loss) before income taxes and
 minority interest   .....................       854          792         1,081        1,343
Income tax expense   .....................       208          181           109          139
Minority interest ........................       (65)         (43)          (30)         (43)
                                             --------       -------    ---------     --------
Net earnings (loss)  .....................  $    581      $   568     $     942     $  1,161
                                             ========       =======    =========     ========
As a Percentage of Revenues:
Revenues .................................     100.0%       100.0%        100.0%       100.0%
Cost of revenues  ........................      45.6         39.6          38.2         24.2
                                             --------       -------    ---------     --------
Gross margin   ...........................      54.4         60.4          61.8         75.8
                                             --------       -------    ---------     --------
Operating expenses:
 Selling expense  ........................       9.9         13.3          14.9         18.9
 Research and development expense   ......      11.4         13.4          12.7         15.4
 General and administrative expense ......       6.5          9.2           5.6         10.6
                                             --------       -------    ---------     --------
 Total operating expenses  ...............      27.8         35.9          33.2         44.9
                                             --------       -------    ---------     --------
Operating income (loss) ..................      26.6         24.5          28.6         30.9
Other income (expense)  ..................       0.5          1.1          (0.6)         0.2
                                             --------       -------    ---------     --------
Earnings (loss) before income taxes and
 minority interest   .....................      27.1         25.6          28.0         31.1
Income tax expense   .....................       6.6          5.8           2.8          3.2
Minority interest ........................      (2.1)        (1.4)         (0.8)        (1.0)
                                             --------       -------    ---------     --------
Net earnings (loss)  .....................      18.4%        18.4%         24.4%        26.9%
                                             ========       =======    =========     ========
</TABLE>




<PAGE>

<TABLE>
<CAPTION>
                                                                   Three months ended
                                            ----------------------------------------------------------------
                                              Mar. 31,    June 30,      Sept. 30,     Dec. 31,     Mar. 31,
                                               1996         1996          1996          1996        1997
                                            -----------  -----------  ------------  ------------  ----------
                                                                     (in thousands)
<S>                                         <C>          <C>          <C>           <C>           <C>
Consolidated Statement of Earnings Data:
Revenues .................................  $  6,089      $ 5,043     $   4,780       $ 2,670     $  3,887
Cost of revenues  ........................     1,856        1,732         1,850         1,317        1,602
                                             --------       -------    ---------        -------    --------
Gross profit   ...........................     4,233        3,311         2,930         1,353        2,285
                                             --------       -------    ---------        -------    --------
Operating expenses:
 Selling expense  ........................       781          555           586           549          493
 Research and development expense   ......       394          456           425           653          374
 General and administrative expense ......       364          509           453           486          411
                                             --------       -------    ---------        -------    --------
 Total operating expenses  ...............     1,539        1,520         1,464         1,688        1,278
                                             --------       -------    ---------        -------    --------
Operating income (loss) ..................     2,694        1,791         1,466          (335)       1,007
Other income (expense)  ..................        12           20            39            30           15
                                             --------       -------    ---------        -------    --------
Earnings (loss) before income taxes and
 minority interest   .....................     2,706        1,811         1,505          (305)       1,022
Income tax expense   .....................       355          290           180            33          167
Minority interest ........................       (94)         (86)          (67)           34          (11)
                                             --------       -------    ---------        -------    --------
Net earnings (loss)  .....................  $  2,257      $ 1,435     $   1,258      ($   304)    $    844
                                             ========       =======    =========        =======    ========
As a Percentage of Revenues:
Revenues .................................     100.0%       100.0%        100.0%        100.0%       100.0%
Cost of revenues  ........................      30.5         34.3          38.7          49.3         41.2
                                             --------       -------    ---------        -------    --------
Gross margin   ...........................      69.5         65.7          61.3          50.7         58.8
                                             --------       -------    ---------        -------    --------
Operating expenses:
 Selling expense  ........................      12.8         11.0          12.2          20.5         12.7
 Research and development expense   ......       6.5          9.0           8.9          24.5          9.6
 General and administrative expense ......       6.0         10.1           9.5          18.2         10.6
                                             --------       -------    ---------        -------    --------
 Total operating expenses  ...............      25.3         30.1          30.6          63.2         32.9
                                             --------       -------    ---------        -------    --------
Operating income (loss) ..................      44.2         35.5          30.7         (12.5)        25.9
Other income (expense)  ..................       0.2          0.4           0.8           1.1          0.4
                                             --------       -------    ---------        -------    --------
Earnings (loss) before income taxes and
 minority interest   .....................      44.4         35.9          31.5         (11.4)        26.3
Income tax expense   .....................       5.8          5.7           3.8           1.3          4.3
Minority interest ........................      (1.5)        (1.7)         (1.4)          1.3         (0.3)
                                             --------       -------    ---------        -------    --------
Net earnings (loss)  .....................      37.1%        28.5%         26.3%        (11.4%)       21.7%
                                             ========       =======    =========        =======    ========
</TABLE>



Liquidity and Capital Resources

     The Company has funded its working capital requirements principally through
net cash provided by operations. As of March 31, 1997, the Company had $3.0
million in cash and cash equivalents and $3.9 million in working capital. Net
cash provided by operations was $0.3 million, $5.5 million, $2.7 million and
$1.0 million for the first quarter of 1997, and for the years ended December 31,
1996, 1995 and 1994, respectively, and principally consisted of net earnings.

     Purchases of machinery, equipment and leasehold improvements in 1996 were
$0.6 million, including $0.2 million to purchase a coordinate measuring machine
for the Company's Cherry Hill, New Jersey facility. In 1996, the Company leased
a 28,630 square foot office and manufacturing facility in Cherry Hill, New
Jersey and spent approximately $0.2 million on leasehold improvements and
furniture costs to outfit this facility, which houses the Company's domestic
manufacturing and customer operations and administrative functions. The Company
also leased 3,077 square feet of office and manufacturing space in Singapore
during 1996 and spent approximately $0.2 million on leasehold improvements and
furniture expenditures to outfit this facility, which houses the Company's
Southeast Asian customer operations office and is anticipated to be utilized for
additional manufacturing operations commencing in 1998.

                                       18


<PAGE>


     The Company has a five-year $0.2 million term loan, due in August 2001, and
a $1.5 million revolving line of credit with a commercial bank. The interest
rate on the term loan is fixed at 8.65%, and the revolving line of credit bears
interest at the bank's prime lending rate. The term loan is collateralized by
liens on certain equipment and furnishings located at the Company's Cherry Hill,
New Jersey facility. The revolving line of credit is collateralized by a pledge
of certain assets of inTEST CORP. No amounts were outstanding under the line of
credit as of March 31, 1997 or December 31, 1996. The Company does not have any
capital lease obligations.

     The Company believes that existing cash and cash equivalents, its available
line of credit, anticipated net cash provided by operations and the net proceeds
from the offering will be sufficient to meet the Company's cash requirements for
the next 24 months. However, if the Company were to make any acquisitions, the
Company may require additional equity or debt financing to meet working capital
requirements or capital expenditure needs.

     Although the Company has historically paid cash dividends to its
stockholders, the Company does not anticipate that it will pay any dividends for
the foreseeable future following the offering, except for the final S
corporation distribution. See "S Corporation Distributions" and Note 3 of Notes
to Consolidated Financial Statements. The Company intends to retain future
earnings, if any, for reinvestment in the operation and expansion of the
Company's business.

                                       19


<PAGE>



 
                                  BUSINESS

     The Company is a leading independent designer, manufacturer and marketer of
docking hardware and test head manipulators, which are used with automatic test
equipment ("ATE") by semiconductor manufacturers during the testing of wafers
and packaged devices. The Company also designs and markets related ATE interface
products including high performance test sockets, interface boards and probing
assemblies. The Company's products are designed to improve the utilization and
cost-effectiveness of ATE (including testers, wafer probers and device handlers)
during the testing of linear, digital and mixed signal integrated circuits.
Since inception in 1981, the Company has developed and continues to support over
4,600 products and has been granted 13 U.S. patents for its technology.

     The Company's largest customers include Lucent Technologies, Motorola, SGS
Thomson and Texas Instruments among semiconductor manufacturers, and Credence
Systems, LTX and Teradyne among ATE manufacturers. The Company designs, markets
and supports its products globally both through Company account managers based
in New Jersey, Texas, California, the U.K., Singapore and Japan and through
independent sales representatives in the U.S. and abroad. The Company's
executive offices are located in Cherry Hill, New Jersey. Manufacturing
facilities are located in New Jersey and the U.K.

Industry Background

     Testing is an integral and necessary step during the design and manufacture
of wafers and packaged devices. The increasing worldwide demand for
semiconductors in recent years has led to an increase in the demand for ATE.
According to VLSI Research Inc., in 1996 semiconductor manufacturers spent an
estimated $3.7 billion on testers (the test head and mainframe cabinet) and $1.3
billion on wafer probers and device handlers. The increasing complexity of
wafers and packaged devices, as manifested by larger wafers, higher speeds,
growing pin counts, smaller packaged devices and greater levels of integration
has changed the design, architecture and complexity of ATE used during the
testing of such devices.

     Testers range in price from approximately $0.5 million to over $3.0 million
each depending primarily on the complexity of the device to be tested and the
number of test heads, typically one or two, with which each tester is
configured. Probers and handlers range in price from approximately $0.1 to $0.3
million. A typical test floor of a large semiconductor manufacturer can have
approximately 100 test heads and 100 probers or 250 handlers available for use
at any one time. Given such a substantial investment, semiconductor
manufacturers employ testing processes which seek to maximize ATE and floor
space utilization.

     Each integrated circuit is tested at least twice during the manufacturing
process to ensure the functional and electrical performance of the circuits
prior to shipment to the device user. After wafer fabrication, each circuit on a
wafer is automatically positioned under a probing assembly by a prober where the
individual circuits on the wafer are tested (the "front-end test"). After device
packaging, devices are individually fed by the handler to an environmentally
controlled test socket where the device is again tested (the "back-end test").
Manipulators facilitate the movement of a test head to a prober or handler, and
"docking" describes the function of connecting a test head to a prober or
handler with mechanically engineered hardware. The following chart illustrates
the major steps in the semiconductor manufacturing process.

            [Fig. 1: Schematic depiction of the fabrication of an integrated
            circuit using blocks to represent each major step of the process
            from raw wafer to finished device with special emphasis on "Wafer
            Test" and "Final Test."]

     Until the early 1970s, testers were designed with the interface circuits
(also referred to as pin electronics) mounted inside the tester's mainframe
cabinet and connected the pin electronics to the prober's probing assembly or to
the handler's test socket via an electrical cable, typically five to ten feet
long. As devices became faster, more complex and more precise, signal distortion
inherent with the use of such cables resulted in degraded test results. Although
certain devices are still tested in this manner, such devices tend to be used in
older, less technologically advanced applications.

     During the 1970s, tester manufacturers responded by moving the pin
electronics from the tester's mainframe cabinet to an independent test head,
which could be directly mated with a prober or handler, thereby

                                       20


<PAGE>

eliminating the problems associated with using cables as the connection between
the tester's pin electronics and the prober or handler. Direct mating of the
test head pin electronics to the prober's probing assembly or to the handler's
test socket was accomplished by mounting the test head directly to the prober or
handler with a pivot-mechanism manipulator resembling a waffle iron. Such a 
combination resulted in the test head being "dedicated" to only one prober or 
one handler.

     Dedicated manipulators are of greatest value in ATE systems in which the
test head is infrequently disconnected and re-connected to and from one prober
or handler to another prober or handler. Consequently, dedicated manipulators
are used (i) primarily at front-end test, where large, homogeneous lots of
wafers are tested for long, uninterrupted periods of time, and (ii) at back-end
test, where high volume, commodity devices such as DRAMs are tested in large
lots. However, back-end non-commodity devices, such as microcontrollers and
telecommunications devices, generally are tested in smaller lots due to varying
package types and test specifications, thereby requiring frequent handler
changes.

     In 1980, free-standing manipulators were introduced to minimize ATE
downtime and increase device testing throughput. Such manipulators used
hand-cranked lead screws to position a test head to a prober or handler. These
early manipulators were only marginally better than the waffle-iron design and
did not significantly improve ATE utilization due to the lack of motion freedom
necessary for successful docking.

     Users of these early manipulators attempted to precisely align fragile pin
electronics to test sockets and probing assemblies without docking hardware.
Lack of proper docking hardware often can cause deterioration and damage to the
interface boards, test sockets or probing assemblies. Such damage can lead to
compromised or inaccurate test results and the rejection of good wafers or
devices (yield loss), or, more costly, the acceptance of unsatisfactory wafers
or devices (quality error). In addition, successfully connecting a test head
held by a free-standing manipulator to a prober or handler without docking
hardware is difficult and time-consuming.

     The Company's docking hardware and free-standing universal manipulators are
designed to improve the utilization of ATE, particularly ATE employed in
back-end non-commodity flexible testing environments, by facilitating the quick,
easy and safe changeover of test heads to probers and handlers. The following
chart illustrates a current, typical ATE system configuration.

            [Fig. 2: Representation of an ATE test system showing a side-docking
            device handler and an in2 test head manipulator holding the test
            head in the undocked position. Test head and handler are shown
            equipped with inTEST docking hardware.]

     The Company's docking hardware products mechanically control the intimate
interface between the test head's interface board and the prober's probing
assembly or handler's test socket. As a result, fragile interface boards, test
sockets or probing assemblies are protected from damage during docking. The
Company's docking hardware allows semiconductor manufacturers to achieve cost
savings by (i) improving ATE utilization, (ii) improving the accuracy and
integrity of test results and (iii) reducing the need to repair or replace
expensive ATE interface products. The Company's docking hardware can be designed
for use with substantially all makes and models of test heads, probers and
handlers, and can usually be designed to allow all the ATE on a test floor to be
mechanically plug-compatible. Plug-compatibility simplifies the docking
procedures, allowing for increased flexibility and utilization of test heads,
probers and handlers on a test floor.

     The Company's free-standing universal manipulators are designed to be used
in either a dedicated or a flexible test environment. In addition, the Company's
manipulators have been engineered to hold test heads in what seeks to replicate
a "zero gravity" free space. As a result, an operator using no more than 22
pounds of force can reposition the test head by grasping it in his or her hands
and gently moving the test head into position to dock with a prober or handler.
Test heads currently in use weigh up to approximately 900 pounds and measure up
to a cubic yard in volume.

     A test head held in the Company's free-standing universal manipulator and
equipped with the Company's docking hardware can be easily, quickly and safely
docked to any handler. After testing a particular production lot of devices, the
test head can quickly and easily be disconnected and docked to another handler
for testing either a subsequent lot of the same packaged device or to test a
different device.

                                       21


<PAGE>


     The continued development of more complex devices will require faster,
higher pin count, and larger and heavier test heads. The Company believes that
semiconductor manufacturers will continue to demand docking hardware and
manipulators which exhibit corresponding design changes and improvements in
utilization and functionality.

Strategy

     The Company's goals are to supply the highest quality docking hardware,
test head manipulators and related ATE interface products, and to provide the
most cost effective ATE interface solutions to the semiconductor industry. The
following elements, all of which are interrelated, form the basis of inTEST's
strategy:

     Capitalize on Experience and Expertise. Over the past 15 years, the Company
has developed numerous generations of docking hardware and test head
manipulators. The Company has designed, and continues to support, over 4,600
unique products and maintains over 5,100 computerized engineering drawings.
Substantially all of the Company's products are customized to a customer's
particular ATE system configuration. As a result, the Company has accumulated
substantial technical design expertise, evidenced in part by having been granted
13 U.S. patents to date, with two U.S. patent applications pending. The
Company's product development efforts are focused on the needs of semiconductor
manufacturers and seek to establish the Company's docking hardware and
manipulator products as the industry standard. For example, the Company is
currently developing a new series of fully-automatic, microprocessor-controlled
dedicated manipulators (the Test Head Hoist). These manipulators are primarily
designed for front-end wafer and back-end commodity device testing, two market
segments which the Company has not traditionally targeted.

     Maintain Customer Relationships. As an independent provider of docking
hardware and test head manipulators, the Company has cultivated and maintains
close working relationships with nearly all major semiconductor and ATE
manufacturers. The long term and interactive nature of such customer
relationships provides the Company's account managers with hands-on knowledge of
leading-edge test procedures, test room protocol, ATE systems and the economics
of testing. The Company works with its customers in identifying ATE interface
problems, defines and custom designs product solutions, installs the Company's
products and provides post-installation follow-up and operational support. The
Company believes that by maintaining such relationships, it will be able to
respond quickly to new ATE interface applications. The Company believes that its
direct access to a broad and diversified base of ATE system environments
provides it with an important competitive advantage.

     Expand International Presence. The Company intends to add manufacturing
capabilities to its existing facility in Singapore in 1998 and to consider
establishing operations in other key back-end markets such as China, Malaysia,
the Philippines, Taiwan or Thailand. The Company believes that proximity to
semiconductor manufacturers enables the Company to respond more quickly and
accurately to its customers' needs. In addition, employing account managers
native to such markets minimizes language and cultural barriers and provides
market-specific technical and operational insight.

     Pursue Complementary Acquisitions. The Company will seek to acquire
businesses (domestic or foreign), technologies or products that are
complementary to the Company's docking hardware and manipulator products,
including related ATE interface products that must be replaced periodically and
could result in additional recurring revenues. The Company is not currently a
party to any agreement or understanding with respect to any acquisition, nor has
it identified any specific acquisition targets. However, there are numerous
companies which manufacture related ATE interface products that the Company
believes could enhance its ability to provide its customers with the means to
improve the efficiency and cost-effectiveness of semiconductor testing
processes. The Company does not intend to expand its lines of docking hardware
and manipulators by acquisition, nor to acquire tester, prober or handler
manufacturers.

Products

     The Company designs, manufactures and markets docking hardware and test
head manipulators used by semiconductor manufacturers during the testing of
wafers and packaged devices. The Company also designs and markets related ATE
interface products. The Company's products are designed to improve the
utilization and cost-effectiveness of testers, wafer probers and device
handlers. Substantially all of the Company's products are customized for use
with particular ATE and, in the case of docking hardware, also to achieve
plug-compatibility among particular combinations of ATE. The Company designs and
manufactures a full line of docking hardware,

                                       22


<PAGE>

manipulators and related ATE interface products for use with more than 175 test
heads, 30 probers and 300 handlers, all of which are mechanically unique makes
and models. The Company has designed and continues to support more than 4,600
products, any of which can be manufactured upon request.

Docking Hardware and ATE Interface Products

     The Company's docking hardware is designed for use with floating-head
universal manipulators, which are used when maximum mobility and
inter-changeability of handlers between test heads is required. The Company's
docking hardware provides the mechanical control to safely connect, with near
zero electrical length, the test interface board with either the probing
assembly on a prober or the test socket on a handler. A simple cam action docks
and locks the test head to the prober or handler so that the two become a single
mechanism which prohibits motion of the test head relative to the prober or
handler. This minimizes deterioration of the interface boards, test sockets and
probing assemblies caused by the constant vibration characteristic of the
operation of all probers and handlers. The Company's docking hardware allows an
operator to manually align the probing assembly or test socket to within .005"
with respect to the interface board on the test head.

            [Fig. 3: Close-up of test head and handler from Fig. 2 showing
            details of inTEST docking hardware in the un-docked position.]

     The Company offers six standard four-cam families and three standard
three-cam families with load ratings of 200, 400 and 600 pounds. The Company's
docking families are primarily distinguished from one another by the number of
docking cams and guide pins, the load rating and the size of test head interface
boards that can be used with each particular family of docking hardware. The
Company's docking hardware products range in price from approximately $2,000 to
$12,000.

     The Company's docking hardware products are distinguished from those
offered by ATE manufacturer competitors by the ability of the Company's products
to make multiple competing brands of test heads plug-compatible with multiple 
brands of probers and handlers used by a semiconductor manufacturer by only
changing interface boards. Creating such plug-compatibility requires detailed
information about competing ATE that would generally not be available to a
competing ATE manufacturer. Plug-compatibility permits non-commodity
semiconductor manufacturers to reduce the changeover time required to un-dock a
test head from one handler and dock it to another handler between production
lots or when changing the device type being tested.

     In addition, the Company designs and sells a variety of related ATE
interface products including high performance test sockets, interface boards,
probing assemblies and other products. The Company custom designs all docking
hardware and related ATE interface products for the specific combinations of
test heads and probers or handlers used by its customers.

Manipulator Products

     in2 Test Head Positioner. The in2 Test Head Positioner ("in2") is a
universal manipulator which can be designed to hold any test head. A universal
manipulator enables the test head to be repositioned for alternate use with any
one of several probers or handlers on a test floor. The in2 is distinguished
from universal manipulators manufactured by competitors by its innovative,
floating-head design. The design of the in2 allows a test head to be held in an
effectively weightless state, moved up or down, right or left, forward or
backward and rotated around each axis (six degrees of motion freedom) by an
operator using no more than 22 pounds of force. Consequently, an operator can
manually reposition the test head by grasping it in his or her hands and gently
moving the test head into position to dock with the prober or handler. This same
design feature allows the operator to dock the test interface board (which is
used to connect the test head's pin electronics to the probing assembly on a
prober or to the test socket on a handler) with near zero electrical length
between the pin electronics and the probing assembly or the test socket, while
protecting the fragile electrical contacts from inadvertent damage during the
docking action.

     The Company manufactures six styles of the in2, all of which are available
in eight different load-rated sizes. The styles include one tumble mode style
and five cable pivot style manipulators. Each style provides a distinct
combination of performance characteristics suited to different customer
applications. A tumble mode positioner might be specified for various reasons
including test head form factor, compatibility with in-line auto-

                                       23


<PAGE>

mation, cable support simplicity or cost minimization. Reasons for specifying a
cable pivot positioner could include providing improved handling characteristics
necessary for larger test heads, the ability to handle test heads with short
mainframe-to-test head cables or the necessity to position the test head close
to the floor. In addition, the Company designs telescopic cable supports to be
used with its cable pivot manipulators; these cable supports minimize bending
and twisting stress to mainframe-to-test head cables, which can be delicate yet
weigh several hundred pounds. The in2 ranges in price from approximately $12,000
to $100,000 depending upon load capacity, manipulator style and the type of
cable management.

     Test Head Hoist. In July 1996, the Company introduced a new,
fully-automatic, electrically-powered and microprocessor-controlled dedicated
manipulator called the Test Head Hoist ("THH"). The patented, overhead design of
the THH series manipulator uses a powered scissor mechanism to raise and lower a
test head to a prober or a top docking handler. This design enables a THH to
dock very large test heads (weight tested to 1,000 pounds) within .005".

            [Fig. 4: Illustration of Test Head Hoist with test head and prober
            shown from 3/4 front view.]

     Although the Company has had no sales of the THH series manipulator to
date, the Company believes that the THH series of manipulators will be
attractive to semiconductor manufacturers for testing 300 mm wafers and packaged
memory devices. The Company's THH is the only fully-automatic manipulator which
enables a test head to be automatically docked to a prober or handler with the
push of one button. The Company believes that the THH enables semiconductor
manufacturers to increase floor space utilization of their ATE test systems by
25% to 40% over that achieved by waffle-iron style dedicated manipulators or
universal manipulators because a THH series manipulator has a virtually zero
"footprint." The Company does not expect significant sales of the THH
manipulators before 1999.

Markets and Customers

     The Company markets its products globally to semiconductor manufacturers
and, to a lesser extent, ATE manufacturers on an OEM basis. The Company believes
that it sells to most major semiconductor manufacturers in the world. The
Company's docking hardware and universal manipulators are primarily used during
back-end testing of non-commodity packaged devices. Such devices include linear,
digital and mixed signal integrated circuits (such as microprocessors, digital
signal processing chips, ASICs and non-commodity memory devices) and primarily
have applications in the automotive, computer, consumer products and
telecommunications industries.

     The Company believes its sales of docking hardware and manipulators are a
function of the general level of capital expenditures by semiconductor
manufacturers. In addition, the Company's sales of docking hardware generally
are driven by changes in device designs or test methods, industry-wide volume of
device testing, sales of new handlers and, to a lesser extent, sales of new test
heads. In the past, sales of the Company's docking hardware generally have been
strong when spending for test heads was low. During such times, the Company
believes that semiconductor manufacturers seek to improve the utilization,
performance and efficiency of existing ATE by purchasing docking hardware. The
Company's sales of manipulators generally follow purchases of test heads by the
Company's semiconductor manufacturer customers. The Company believes its sales
of related ATE interface products primarily depend upon operating expenditures
of the Company's semiconductor manufacturer customers.

     Both North American and European semiconductor manufacturers have located
most of their back-end factories in Southeast Asia. The front-end wafer
fabrication plants of U.S. semiconductor manufacturers are primarily in the U.S.
Likewise, European, Taiwanese, South Korean and Japanese semiconductor
manufacturers primarily have located their wafer fabs in their respective
countries. The Company's sales to Japanese semiconductor manufacturers primarily
consist of test sockets and interface boards. Sales of docking hardware and
universal manipulators have been limited in Japan and South Korea because
manufacturers in these countries emphasize mass-produced products such as memory
devices and other commodity devices. Commodity devices are typically tested
using dedicated manipulators rather than universal manipulators with docking
hardware.

                                       24


<PAGE>


     As part of the Company's strategy to be domiciled in its major markets, the
Company established inTEST LTD in the U.K. in 1985, inTEST KK in Japan in 1987
and inTEST PTE in Singapore in 1990. inTEST LTD designs, manufactures and
markets the Company's products principally in the European market. inTEST KK was
established to be a liaison office with Japanese ATE manufacturers and to market
inTEST products in Japan. In addition, inTEST KK initiated the Company's
business of designing and marketing related ATE interface products. inTEST PTE 
designs, markets and provides technical support to customers in Southeast Asia, 
and it intends to commence manufacturing operations in Singapore in 1998.

     The Company has maintained long term relationships with substantially all
ATE manufacturers. The Company believes its relations with such manufacturers
are good and have been additionally strengthened due to the fact that the
Company does not compete with such manufacturers for testers, probers and
handlers. The Company believes that maintaining such relationships is essential
to its ability to provide plug-compatible ATE interface solutions.

     The following semiconductor and ATE manufacturers have each purchased at
least $250,000 of the Company's products since the beginning of 1994:

 Analog Devices             National Semiconductor
 Credence Systems           NEC
 Harris                     Philips Electronics
 Hewlett Packard            Schlumberger
 Intel                      SGS Thomson
 LTX                        Symbios Logic
 Lucent Technologies        Teradyne
 Matsushita                 Texas Instruments
 Microchip Technologies     Tokyo Electron
 Motorola                   Xilinx

     The Company's largest customers include Lucent Technologies, Motorola, SGS
Thomson and Texas Instruments among semiconductor manufacturers, and Credence
Systems, LTX and Teradyne among ATE manufacturers. See "Risk Factors -- Customer
Concentration."

Manufacturing and Supply

     The Company's principal manufacturing operations consist of assembly and
testing at its facilities in New Jersey and in the U.K. In 1998, the Company
plans to commence similar operations in its Singapore facility. The Company
believes that it is able to respond more quickly and accurately to its customers
needs by maintaining manufacturing facilities and technical support in
geographic markets where its semiconductor manufacturer customers are located.

     The Company assembles its docking hardware, manipulator products and
certain of its probing assemblies from a combination of standard components and
fabricated custom parts which have been manufactured to the Company's
specifications by third party manufacturers. The Company's related ATE interface
products, such as test sockets, interface boards and other of its probing
assemblies, are also manufactured to the Company's specifications by third party
manufacturers. The Company's policy is to use the highest quality raw materials
and components in its products. The primary raw materials used in fabricated
parts are various grades of aluminum and steel, in interface boards are
fiberglass and copper and in test sockets are plastic and copper, all of which
are widely available. Substantially all components are purchased from multiple
Suppliers. Certain raw materials and components are purchased from single
Suppliers. However, the Company believes that all materials and components are
available in adequate amounts from other sources. See "Risk Factors --
Dependence on Key Suppliers."

     In New Jersey, the Company controls the quality of raw materials,
fabricated parts and components by conducting incoming inspections using
sophisticated measurement equipment, including a coordinate measuring machine,
to ensure that products with critical dimensions meet the Company's
specifications. In the U.K., the Company relies upon its Suppliers for
inspecting the quality of fabricated parts. The Company intends to buy a

                                       25


<PAGE>

coordinate measuring machine for inTEST LTD by the end of 1997. The Company's
policy is to inspect all products at various stages prior to shipment. The
Company's inspection standards have been designed to comply with applicable MIL
specifications and ANSI standards. The Company is preparing a quality manual to
comply with such specifications and standards in anticipation of applying for
ISO 9001 certification.

Sales and Distribution

     In North America, the Company sells to semiconductor manufacturers
principally through independent, commissioned sales representatives and to ATE
manufacturers through Company account managers. North American sales
representatives also coordinate product installation and support with the
Company's technical staff and participate in trade shows. Technical support is
provided to the Company's North American customers and independent sales
representatives by Company employees based in Cherry Hill, New Jersey,
Sunnyvale, California and Austin, Texas.

     In Europe, the Company sells to semiconductor and ATE manufacturers through
Company account managers, except in Belgium and Holland where the Company uses
an independent sales representative. In Japan, the Company sells to
semiconductor and ATE manufacturers through Company account managers. In China,
Hong Kong, Malaysia, the Philippines, Singapore, South Korea, Taiwan and
Thailand, the Company sells through independent sales representatives.
International sales representatives are responsible for sales, installation,
support and trade show participation in their geographic market areas.

     Company account managers are responsible for a portfolio of customer
accounts and for managing certain independent sales representatives. In
addition, Company account managers are responsible for applications engineering,
custom product design, pricing, quotations, proposals and transaction
negotiations.

Competition

     The Company's competitors include independent manufacturers of docking
hardware, manipulators and related ATE interface products, designers and
manufacturers of ATE and, to a lesser extent, semiconductor manufacturers'
"in-house" ATE interface groups. The Company principally competes on the basis
of product performance and functionality, product reliability, customer service,
applications support, price and timely product delivery.

     The independent manufacturers of docking hardware and manipulators which
compete with the Company include Reid-Ashman Manufacturing of the U.S.,
Microhandling of Germany and Shang Sheng of Taiwan, each of which manufactures
docking hardware and manipulators. The manufacturers of ATE which compete with
the Company in the sale of docking hardware and universal manipulators include
Credence Systems, LTX, Schlumberger and Teradyne. Such manufacturers of ATE may
be both competitors and customers of the Company. In addition, in the sale of
related ATE interface products there are approximately 20 manufacturers of
interface boards, four manufacturers of high performance test sockets and eight
manufacturers of probing assemblies. See "Risk Factors -- Competition."

Patents and Other Proprietary Rights

     The Company currently holds 13 U.S. patents and 64 foreign patents and has
pending two U.S. patent applications and more than 30 foreign applications that
cover various aspects of its technology. The Company's policy is to protect its
technology by filing patent applications for the technologies that the Company
considers important to its business. The Company first filed for patent
protection in the U.S. for its docking hardware and the in2 test head
manipulator in 1982.

     The Company also relies on trade secrets and unpatentable knowhow to
protect its proprietary rights. It is the Company's policy to require, as a
condition of permanent employment, that all employees of the Company agree to
assign to the Company all rights to inventions or other discoveries relating to
the Company business made while employed by the Company. In addition, all
employees agree not to disclose any information regarding the Company which is
private or confidential.

                                       26


<PAGE>


     The Company has notified one of its competitors that the Company believes
the competitor's products infringe on one of the Company's U.S. patents. The
competitor responded by alleging that certain claims of the patent are invalid
based on an earlier issued U.S. patent. The Company, in order to strengthen its
patent position, requested reexamination of its patent by the U.S. Patent and
Trademark Office (the "PTO") over that earlier issued U.S. patent. The
competitor thereafter also requested a reexamination of the patent. A
reexamination provides the PTO with an opportunity to reevaluate the validity of
the claims of a patent previously issued by the PTO. On April 7, 1997, the PTO
issued an Office Action in Reexamination confirming five of the nine claims of
the Company's patent, and rejecting four claims.  On April 29, 1997, the 
Company's patent attorney presented to the Examiner in charge of the 
Reexamination a minor amendment to the claims. In response, the Examiner agreed
that the proposed amendment appears to overcome the rejection of the four 
claims. Based on advice of its patent counsel, the Company believes that upon
formal submission of the proposed amendment, all claims will be deemed
patentable and the Commissioner of the PTO will issue a Certificate of
Reexamination to that effect. Although there can be no assurance, the Company
believes that the failure of the PTO ultimately to deem patentable some or all
of the four claims rejected in the Office Action will not have a material 
adverse effect on the Company's business or results of operations. See
"Business--Patents and Other Proprietary Rights."
 

Computer Systems

     The Company maintains an MIS system at each of its facilities. These
systems are designed to (i) process all quotations, sales orders, work orders,
and purchase orders; (ii) plan, control and allocate inventory; (iii) plan and
schedule production; (iv) cost and price products; and (v) maintain accounting
and financial records. The MIS systems provide a central database of price
lists, product descriptions, applications data, design manuals and engineering
documentation and are simultaneously accessible by all employees of the Company.
In addition, the MIS systems prompt the actions of many of the employees of the
Company, including designers, buyers and inspectors. The MIS systems, which are
fully integrated, interactive and real-time, have been extensively customized by
both Company employees and outside consultants. The MIS systems control the
Company's inventory of approximately 12,000 fabricated parts, 6,000 purchased
parts, 11,000 finished goods and 1,000 sub-assemblies.

     The Company utilizes LAN-based CAD systems at each of its facilities. The
CAD systems currently contain over 4,000 of the Company's 7,600 fabrication
drawings and over 1,100 of the Company's 1,800 customer drawings of product
applications, floor plans and operating procedures. All new designs and drawings
are created in CAD and engineering changes are published as CAD drawings as the
changes are adopted.

Backlog

     At March 31, 1997, the Company's backlog of unfilled orders for all
products was approximately $2.3 million compared with approximately $4.3 million
at March 31, 1996. The Company's backlog includes customer purchase orders which
have been accepted by the Company. Although backlog generally is shipped within
45 days, the backlog at March 31, 1996 was unusually high and was shipped over
the next 70 days. The Company's backlog at March 31, 1997 represents shipments
which are expected to be made in 40 to 45 days. While backlog is calculated on
the basis of firm purchase orders, no assurance can be given that customers will
purchase the Company's products subject to such orders. As a result, the
Company's backlog at a particular date is not necessarily indicative of sales
for any future period. See "Risk Factors -- Dependence upon Semiconductor
Industry" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

Employees

     At March 31, 1997, the Company had 61 employees, including 26 in customer
operations, 21 in manufacturing operations and 14 in administration.
Substantially all of the Company's key employees are highly skilled and trained
technical personnel, and new technical employees are required to attend an
in-house training program. None of the Company's employees are represented by a
labor union, and the Company has never experienced a work stoppage. The Company
believes that its employee relations are excellent.

Facilities

     The Company's headquarters are located in Cherry Hill, New Jersey in 28,630
square feet of office and manufacturing space leased pursuant to a seven-year
lease which expires in 2003. The Company's facility in the

                                       27


<PAGE>

U.K. is located in Thame in 4,600 square feet of office and manufacturing space
leased pursuant to an assumed, 20-year lease which expires in December 1997. The
Company is currently negotiating renewal terms for this lease. In Singapore, the
Company occupies 3,077 square feet of office and manufacturing space leased
pursuant to a four-year lease which expires in 2000 subject to a two-year
renewal option. In Kichijoji, Japan, the Company occupies approximately 1,200
square feet of office space pursuant to an agreement which is cancelable on
reasonable notice by either party. In Sunnyvale, California, the Company
occupies 1,900 square feet of office and warehouse space leased pursuant to a
five-year lease which expires in 2001. The Company believes that its
headquarters and other existing facilities are adequate to meet its current and
foreseeable future needs.

                                       28


<PAGE>



                                  MANAGEMENT

Executive Officers, Directors and Significant Employees

     The executive officers and directors of the Company are as follows:


<TABLE>
<CAPTION>
Name                                       Age      Position
- ---------------------------------------   ------   -------------------------------------------------
<S>                                       <C>      <C>
Alyn R. Holt (1)  .....................    59       Chairman and Chief Executive Officer
Robert E. Matthiessen (1)(2)  .........    52       President, Chief Operating Officer and Director
Daniel J. Graham (1) ..................    51       Senior Vice President and Director
Hugh T. Regan, Jr.   ..................    37       Chief Financial Officer and Treasurer
Hugh T. Regan, Sr.   ..................    62       Secretary
Richard O. Endres (2)(3)   ............    71       Director
Stuart F. Daniels, Ph.D. (2)(3)  ......    56       Director
</TABLE>


- ------------
(1) Member of the Executive Committee
(2) Member of the Compensation Committee
(3) Member of the Audit Committee

     Other significant employees of the Company include:

Name                       Age      Position
- -----------------------   ------   -------------------------------------
Jack R. Edmunds  ......    56       Director of Operations, inTEST CORP
Brian R. Moore   ......    60       Managing Director, inTEST LTD
Tomoyasu Ogura   ......    47       Representative Director, inTEST KK
Cornelis Hol  .........    59       Managing Director, inTEST PTE

     Alyn R. Holt is a co-founder of the Company and has served as Chairman and
Chief Executive Officer since the Company's inception in September 1981. Mr.
Holt has over 35 years experience in the ATE industry, including various
positions in general management, marketing management and engineering. From 1973
to 1980, Mr. Holt was Manager of the Measurement Systems Division of Siemens
Corporation. From 1966 to 1973, he served in various capacities including Vice
President of Marketing for Computest Corporation, a manufacturer of ATE for the
computer industry. Mr. Holt is a co-inventor on several of the Company's
patents. Mr. Holt holds an M.B.A. from California State University and a B.S. in
Electrical Engineering from South Dakota State University.

     Robert E. Matthiessen was elected President, Chief Operating Officer and a
Director of the Company in February 1997. Prior to that, Mr. Matthiessen served
as Executive Vice President since joining the Company in October 1984. He has
over 25 years experience in the ATE industry, including various positions in
general management, marketing management and engineering management. In 1982,
Mr. Matthiessen co-founded a company engaged in the production of video products
for training, advertising and sales, and served as its President from inception
to 1984. From 1973 to 1981, he served in various engineering and marketing
management positions with the Measurement Systems Division of Siemens
Corporation. Mr. Matthiessen is a co-inventor on several of the Company's
patents. He studied electrical engineering at Drexel University and business
administration at Rutgers University.

     Daniel J. Graham is a co-founder of the Company and has served as Senior
Vice President and a Director of the Company since 1988. Prior to that, Mr.
Graham served as Vice President of the Company since the Company's inception.
Mr. Graham has expertise in integrated circuit test technology and operated his
own software consulting firm from 1978 to 1992. He has over 25 years industrial
experience involving the development of software and hardware systems for ATE.
Mr. Graham is a past Chairman of the Test Technology Technical Committee of the
Institute of Electrical and Electronic Engineers, Inc. (the "IEEE") Computer
Society. He currently serves as General Vice Chair of the International Test
Conference which is sponsored by the IEEE. He holds an M.S. in Computer and
Information Science Engineering from the University of Pennsylvania and a B.S.
with honors in Electrical Engineering from the Queen's University of Belfast,
Northern Ireland.

                                       29


<PAGE>


     Hugh T. Regan, Jr. has served as the Company's Chief Financial Officer and
Treasurer since joining the Company in April 1996. From 1989 to 1995, Mr. Regan
was the Vice President of Finance for Value Property Trust, a publicly traded
real estate investment trust (the "Trust"). From 1995 until he joined the
Company, Mr. Regan was the Chief Financial Officer of the Trust. Mr. Regan holds
a B.S. in Accounting and Finance from Rider University and is a Certified Public
Accountant.

     Hugh T. Regan, Sr. has served as the Company's Secretary since 1982. Mr.
Regan was Chief Financial Officer of the Company from 1982 to 1996. He has
served as President of his accounting firm, Regan Accounting Services, since
1986. He has over 35 years of financial and general management experience in the
computer, ATE and other industries. From 1979 to 1983, he was Executive Vice
President and Chief Financial Officer of Emery Corporation, a home furnishings
manufacturing company. From 1973 to 1979, he was Vice President of Finance and
Chief Financial Officer of Clarke Corporation, a publicly traded building
products manufacturing company. From 1966 to 1973, he was Controller for
Computest Corporation, an early leader in ATE. Mr. Regan holds a B.S. in
Business Administration and Accounting from LaSalle University.

     Richard O. Endres has served as a Director of the Company since April 1982.
He has served as President of VRA, Inc., which provides business planning and
financial services for start-up companies, since 1976. Mr. Endres founded
Computest Corporation in 1962 and served as its President from 1962 to 1973.
Computest was sold to Siemens Corporation in 1973, at which time Mr. Endres
became Group Vice President for Siemens until 1976. From 1948 to 1953, Mr.
Endres was engaged in early transistor circuit development and computer memory
research at RCA's David Sarnoff Research Center. Mr. Endres holds a B.S. in
Electrical Engineering from Purdue University.

     Stuart F. Daniels, Ph.D. is a co-founder of the Company and served as Vice
President and a Director in 1982 and was reappointed as a Director in April
1997. In 1996, Dr. Daniels founded The Daniels Group, which is engaged in
technology transfer and license consulting. From 1980 to 1995, Dr. Daniels held
several management positions with Siemens Corporation. Dr. Daniels also
co-founded Digital General Corp., an ATE company, in 1969. Dr. Daniels holds a
Ph.D. in Electrical Engineering from Case Western Reserve University, an M.S. in
Electrical Engineering from Case Institute of Technology and a B.S. in
Electrical Engineering from the University of New Hampshire. He is also an
adjunct of the Computer Information Science Department at the New Jersey
Institute of Technology. Dr. Daniels holds two patents in ATE technology.

     Jack R. Edmunds has served as Director of Operations since joining the
Company in September 1987. He has over 20 years experience in the ATE industry,
including various positions in operations management, marketing management,
engineering and sales. From 1964 to 1975 he held numerous management positions
in operations, engineering, marketing and sales with Computest Corporation. He
studied business administration at Rutgers University.

     Brian R. Moore has served as the Managing Director of inTEST LTD since
February 1985. From 1982 to 1985, Mr. Moore was a managing partner in Anglo
European Machinery Company, a manufacturer of test head manipulators and other
specialty machines for the ATE industry, which was acquired by inTEST LTD in
1985. He has over 35 years experience in the ATE industry, including various
positions in general management, engineering management, operations management,
marketing and mechanical design. Mr. Moore is a co-inventor on several of the
Company's patents. He studied mechanical engineering at High Wycombe Technical
College in the U.K.

     Tomoyasu Ogura has served as the Representative Director of inTEST KK since
March 1990. Prior to that, Mr. Ogura was Marketing Manager of inTEST KK since
May 1988. From 1981 to 1988, Mr. Ogura was the Technical Manager for a
subsidiary of C. Itoh & Co., a trading company. He has over 20 years experience
in the ATE industry in Japan, including various positions in general management,
sales management, marketing, engineering and sales. Mr. Ogura holds a B.S.
degree in Electrical Engineering from Kanagawa University, Yokohama.

     Cornelis Hol has served as the Managing Director of inTEST PTE since its
inception in April 1990 and as Director of inTEST KK since its inception in
1987. Mr. Hol is also Managing Director of C. Hol Business Development, a
management consulting company he founded in 1986 with which the Company has a
contract for the management of inTEST PTE. In addition, from 1993 to 1995, Mr.
Hol was President of Intertrade

                                       30


<PAGE>

Scientific, Inc., a distributor of semiconductor production equipment ("ITS"),
in the U.S. and Managing Director of ITS in Munich, Germany. He has over 15
years experience in the semiconductor industry in Southeast Asia, Japan, Europe
and the U.S., including various positions in general management, sales and
distribution management. From 1981 to 1986, Mr. Hol was Managing Director of MCT
Asia, a manufacturer of device handlers. Mr. Hol holds a Marine Engineering
degree from De Ruyter School, Flushing, Holland.

     Hugh T. Regan, Jr. is Hugh T. Regan's son; there are no other family
relationships between any of the directors or executive officers of the Company.
Non-employee directors are paid a quarterly retainer of $2,500, a fee of $2,000
per board meeting and a fee of $1,000 per committee meeting that falls on a day
other than a board meeting. In addition, non-employee directors are reimbursed
travel expenses and other costs associated with attending board or committee
meetings. The Company does not pay additional cash compensation to officers of
the Company for their service as directors of inTEST CORP. However, officers who
serve as directors of the Company's foreign subsidiaries receive compensation as
approved each year by such subsidiary's Board of Directors. The Company intends
to hold at least four meetings of the Board of Directors per year. Directors are
also eligible to participate in the Company's 1997 Stock Plan. See " -- 1997
Stock Plan" and " -- Executive Compensation."

Board Committees

     The Board of Directors has three standing Committees: an Executive
Committee, an Audit Committee and a Compensation Committee. The Executive
Committee is responsible for those duties delegated to it by the Board of
Directors. The Audit Committee reviews the results and scope of the audit and
other services provided by the Company's independent auditors. The Compensation
Committee makes recommendations concerning salaries and incentive compensation
for employees of the Company and administers the Company's stock option and
bonus plan. See " -- 1997 Stock Plan."

                                       31


<PAGE>



Executive Compensation

     The following table sets forth certain information with respect to the
compensation paid by the Company for services rendered during the years ended
December 31, 1996, 1995 and 1994, to its Chairman and Chief Executive Officer
and the other executive officers of the Company whose total annual salary and
bonus exceeded $100,000 during such period (each, a "Named Executive Officer").

                          Summary Compensation Table


<TABLE>
<CAPTION>
                                                      Annual Compensation
                                           ------------------------------------------
                                                                      Other annual         All other
 Name and Principal Position      Year      Salary        Bonus       compensation        compensation
- ------------------------------   -------   -----------   ----------   ---------------    ----------------
<S>                              <C>       <C>           <C>          <C>               <C>
Alyn R. Holt   ...............    1996      $155,545      $55,234      $  47,693(1)       $ 145,851(2)
 Chairman and Chief               1995       121,300       44,631         19,876(1)          86,557(2)
 Executive Officer                1994       112,530       18,280         25,337(1)          20,250(2)

Robert E. Matthiessen   ......    1996      $ 97,020      $ 6,750      $  13,578(3)       $   5,720(4)
 President, Chief Operating       1995        92,620           --         14,095(3)             756(4)
 Officer and Director             1994        89,217           --         21,567(3)             756(4)

Daniel J. Graham  ............    1996      $105,200           --      $  18,943(5)       $  35,539(6)
 Senior Vice President and        1995       100,000           --         19,376(5)          45,795(6)
 Director                         1994        95,503           --         20,097(5)          17,116(6)

Hugh T. Regan, Sr. (7)  ......    1996      $113,635           --             --          $  27,628(8)
 Secretary                        1995       106,150           --             --             23,295(8)
                                  1994        95,550           --             --             15,650(8)
</TABLE>


- ------------

(1) Includes: $39,500 for the annual lease value of automobiles for Alyn R. and
    Connie E. Holt in 1996, and $11,250 and $10,250 for Mr. Holt in 1995 and
    1994, respectively; $6,793, $7,426 and $14,087 for group health insurance in
    1996, 1995 and 1994, respectively.
(2) Includes: $3,046, $2,724 and $2,724 for premiums paid on life insurance for
    Mr. Holt in 1996, 1995 and 1994, respectively; $4,486 matching contribution
    to Mr. Holt's 401(k) Plan account in 1996; and $138,319, $83,833 and $17,526
    for serving as a director of inTEST LTD and inTEST KK in 1996, 1995 and
    1994, respectively.
(3) Includes: $8,750, $7,750 and $10,250 for the annual lease value of an
    automobile for Mr. Matthiessen in 1996, 1995 and 1994, respectively; $4,828,
    $5,345 and $11,317 for group health insurance in 1996, 1995 and 1994,
    respectively.
(4) Includes: $1,184, $756 and $756 for premiums paid on life insurance for Mr.
    Matthiessen in 1996, 1995 and 1994, respectively; and $4,536 matching
    contribution to Mr. Matthiessen's 401(k) Plan account in 1996.
(5) Includes: $10,750, $10,750 and $7,550 for the annual lease value of an
    automobile for Mr. Graham in 1996, 1995 and 1994, respectively; $6,793,
    $7,426 and $11,317 for group health insurance in 1996, 1995 and 1994,
    respectively.
(6) Includes: $2,107, $1,436 and $1,466 for premiums paid on life insurance for
    Mr. Graham in 1996, 1995 and 1994, respectively; $4,750 matching
    contribution to Mr. Graham's 401(k) Plan account in 1996; and $28,682,
    $44,359 and $15,650 for serving as a director of inTEST LTD and inTEST KK in
    1996, 1995 and 1994, respectively.
(7) Mr. Regan served as the Company's Chief Financial Officer through April
    1996.
(8) Includes: $785 for premiums paid on life insurance for Mr. Regan in 1996;
    $1,920 matching contribution to Mr. Regan's 401(k) Plan account in 1996; and
    $24,923, $23,295 and $15,650 for serving as a director of inTEST LTD in
    1996, 1995 and 1994, respectively.
 

                                       32


<PAGE>


401(k) Plan

     The inTEST Corporation 401(k) Savings Incentive Plan (the "401(k) Plan")
became effective on January 1, 1996. All employees of inTEST CORP who are at
least 18 years of age and have completed six months of service with the Company
are eligible to participate in the 401(k) Plan. An eligible employee may elect
to contribute up to 15% of his or her compensation each year instead of
receiving that amount in cash, up to the legal limit (the limit for 1997 is
$9,500). The Company will match employee contributions up to 10% of an
employee's compensation, not to exceed $4,750. At the discretion of the Board of
Directors, the Company may also match employee contributions up to an additional
5% of an employee's salary, not to exceed $4,750 or, in aggregate, $9,500 for a
total matched contribution not to exceed 15% of an employee's compensation.

1997 Stock Plan

     Pursuant to the inTEST Corporation 1997 Stock Plan (the "Plan" or the "1997
Stock Plan"), directors, key employees and consultants of the Company are
eligible to receive awards of (i) options to purchase shares of Common Stock and
(ii) shares of Common Stock. Options granted under the Plan may be "incentive
stock options" ("ISOs"), within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or non-qualified stock options
("NQSOs"). Stock awards may be granted in addition to or in lieu of any other
award granted under the Plan. The Company has authorized 500,000 shares of
Common Stock for issuance upon exercise of options or stock awards under the
Plan (subject to anti-dilution and similar adjustments).

     The Plan consists of two parts: the Non-Qualified Plan and the Key Employee
Plan. The Non-Qualified Plan is administered by the Board of Directors of the
Company and the Key Employee Plan is administered by the Compensation Committee
of the Board of Directors of the Company (the Board of Directors or the
Compensation Committee, as the case may be, is referred to herein as the
"Administrator").

     Subject to the provisions of the Plan, the Administrator will determine the
type of award, when and to whom awards will be granted, the number of shares
covered by each award and the terms, provisions and kind of consideration
payable, if any, with respect to awards to key employees and consultants. In
determining the persons to whom awards shall be granted and the number of shares
covered by each award, the Administrator shall take into account the duties of
the respective persons, their present and potential contribution to the success
of the Company and such other factors as the Administrator shall deem relevant.
The Administrator may interpret the Plan and may at any time adopt such rules
and regulations for the Plan as it deems advisable.

     An option may be granted on such terms and conditions as the Administrator
may approve. No option may be granted with an exercise period in excess of ten
years from the date of grant. Generally, ISOs will be granted with an exercise
price equal to the "Fair Market Value" (as defined in the Plan) on the date of
grant; the exercise price of an NQSO will be determined by the Administrator. In
the case of ISOs, certain limitations will apply with respect to the aggregate
value of option shares which can become exercisable for the first time during
any one calendar year, and certain additional limitations will apply to ISOs
granted to persons who, at the time the option is granted, own more than 10% of
the combined voting power of the Company. The Administrator may provide for the
payment of the option price in cash, by delivery of Common Stock having a Fair
Market Value equal to such option price, by a combination thereof or by any
other method. Options granted under the Plan will become exercisable at such
times and under such conditions as the Administrator shall determine, subject to
acceleration of the exercisability of options in the event of, among other
things, a "Change in Control" (as defined in the Plan).

     All options to the extent not earlier exercised, expire on the earliest of
(i) the last business day immediately preceding the tenth anniversary of the
date of grant, (ii) one year following the optionee's termination of his or her
employment or service with the Company (unless such termination is for cause, as
defined in the Plan, in which case any options held by such optionee will
terminate immediately) or (iii) a date set by the Administrator upon a finding
that a change in the financial accounting treatment for the options would or may
have a material adverse effect on the Company. In addition, in the event of a
change of control, as defined in the Plan, the Administrator may take whatever
actions with respect to outstanding options it deems necessary or advisable,
including accelerating the expiration date of any such outstanding option to a
date not earlier than thirty (30) days from the date notice of such acceleration
is given to the respective optionee.

                                       33


<PAGE>


     The Plan further provides for the granting of stock awards, which are
awards of Common Stock which may be subject to restrictions on the sale or other
disposition of such shares, except by will or the laws of descent and
distribution, during such period of time as the Administrator determines. The
Administrator may also impose such other conditions and restrictions, if any, on
the shares as it deems appropriate, including, for example, the continued
employment of the recipient.

     The Board of Directors may at any time suspend, amend, modify or terminate
the Plan provided that, with respect to the Key Employee Plan, any amendment
which would change the eligibility of employees or a class of employees eligible
to receive an option or to increase the maximum number of shares as to which
options may be granted, will only be effective if such action is approved by the
holders of a majority of the issued and outstanding shares of Common Stock. In
addition, no change may be made which would adversely affect any award
previously granted, except with the written consent of the grantee. No awards
may be granted under the Plan more than ten years from the date the Plan was
adopted.

     As of the date of this Prospectus, the Administrator has granted options to
purchase 150,000 shares of Common Stock to key employees pursuant to the Key
Employee Plan. These options, which are ISOs, will become exercisable on a pro
rata basis annually on the first through fifth anniversaries of the date of this
Prospectus. Hugh T. Regan, Jr. will receive options to purchase 30,000 shares of
Common Stock, and is the only executive officer or director of the Company to be
granted options under the Plan to date.

Limitation of Liability and Indemnification

     Pursuant to the provisions of the Delaware General Corporation Law
("DGCL"), the Company has adopted provisions in its Certificate of Incorporation
which limit the personal liability of its directors to the Company or its
stockholders for monetary damages for breach of their fiduciary duty as a
director to the fullest extent permitted by the DGCL, and in its Bylaws which
require the Company to indemnify its directors and officers to the fullest
extent permitted by Delaware law. The Bylaws require the Company to indemnify an
officer or director in connection with a proceeding (or part thereof) initiated
by such officer or director only if the initiation of such proceeding by such
person was authorized by the Board of Directors. The Company has applied for a
directors' and officers' liability insurance policy.

Compensation Committee Interlocks and Insider Participation

     The Compensation Committee consists of Robert E. Matthiessen, Richard O.
Endres and Stuart F. Daniels, Ph.D. Mr. Matthiessen is the President and Chief
Operating Officer of the Company. Mr. Endres has never served as an officer or
employee of the Company. Dr. Daniels was a co-founder of the Company and served
as Vice President and Director in 1982. From 1982 until Dr. Daniels was
re-elected to the Board of Directors in April 1997, his only relationship with
the Company was as a stockholder. Prior to the offering, the Company did not
have a Compensation Committee, and compensation decisions were made by the Board
of Directors, which consisted of Messrs. Holt, Endres and Graham.

                                       34


<PAGE>


                      PRINCIPAL AND SELLING STOCKHOLDERS

     The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of March 31, 1997 and after giving
effect to the sale of shares of Common Stock in the offering by (i) each
Director or Named Executive Officer of the Company, (ii) each person known by
the Company to own beneficially five percent or more of the Common Stock, (iii)
each Selling Stockholder and (iv) all current executive officers and directors
of the Company as a group.


<TABLE>
<CAPTION>
                                             Prior to Offering(1)                                After Offering(1)(2)
                                        -------------------------------                     ------------------------------
                                            Shares                                              Shares
                                         Beneficially     Percentage       Shares Being      Beneficially     Percentage
Name of Beneficial Owner                    Owned           Owned           Offered(2)          Owned           Owned
- -------------------------------------   ---------------   -------------   ---------------   ---------------   ------------
<S>                                     <C>               <C>             <C>               <C>               <C>
Alyn R. Holt (3)(4)(5)   ............     2,083,217          50.9%           232,550          1,850,667          31.3%
Richard O. Endres (3)(4)(6) .........       483,435          11.8             53,965            429,470           7.3
Daniel J. Graham (3)(4)  ............       446,729          10.9             49,868            396,861           6.7
Deed of Trust f/b/o K.D. Holt (3) .         261,727           6.4             29,216            232,511           3.9
Connie E. Holt  .....................       186,948           4.6             20,869            166,079           2.8
Robert E. Matthiessen (4)   .........       160,364           3.9             17,901            142,463           2.4
Hugh T. Regan, Sr. (4)   ............       129,098           3.2             14,411            114,687           1.9
Brian R. Moore (4) ..................        93,219           2.3             10,406             82,813           1.4
Nils O. Ny (4)  .....................        70,106           1.7              7,826             62,280           1.1
Jack R. Edmunds (4)   ...............        67,459           1.6              7,530             59,929           1.0
John W. Lalley  .....................        53,905           1.3              6,017             47,888             *
Micronics Japan Company, Ltd. (7)....        48,209           1.2              5,382             42,827             *
Julian P. Partington (4) ............        45,664           1.1              5,097             40,567             *
Tomoyasu Ogura (4) ..................        43,388           1.1              4,843             38,545             *
Christopher L. West (4)  ............        42,532           1.0              4,748             37,784             *
William R. Blatchley (4) ............        34,274             *              3,826             30,448             *
Ann L. Martz ........................        23,369             *              2,609             20,760             *
Dale G. Holt ........................        18,695             *              2,087             16,608             *
Jerome R. Bortnem (4) ...............        15,579             *              1,739             13,840             *
Stuart F. Daniels, Ph.D. (4)   ......        14,021             *              1,565             12,456             *
John J. Kotarski (4)  ...............         9,347             *              1,043              8,304             *
Tomio Wakamatsu (4)   ...............         3,214             *                359              2,855             *
Kenji Murayama (4) ..................         3,214             *                359              2,855             *
All executive officers and directors
 as a group (7 persons)  ............     3,316,864          81.1%           370,260          2,946,604          49.7%
</TABLE>


- ------------
*  Denotes less than 1%.

(1) Unless otherwise indicated below, the persons in the above table have sole
    voting and investment power with respect to all shares owned by them.
    Includes 300,443 shares of Common Stock issued in the Exchange. See "The
    Company."
(2) If the Underwriters' over-allotment option is exercised in full, the Selling
    Stockholders will sell an aggregate of 341,250 shares, allocated among them
    in the same proportion as the relative number of shares being offered by
    each of them as set forth above.
(3) The address of the stockholder is: c/o the Company, 2 Pin Oak Lane, Cherry
    Hill, New Jersey 08003.
(4) The Selling Stockholder is, or was during the past three years, a director,
    officer or employee of the Company.
(5) Does not include 261,727 shares held in trust for the benefit of Mr. Holt's
    child or 186,948 shares owned by Mr. Holt's spouse, Connie E. Holt. Mr. Holt
    disclaims beneficial ownership of the shares held in trust for his child and
    the shares owned by his spouse. Includes 48,487 shares acquired pursuant to
    the Exchange. See "The Company."
(6) Includes 261,727 shares held in trust for the benefit of Mr. Holt's child
    for which Mr. Endres is trustee.
(7) inTEST KK occupies its facility pursuant to an agreement with this Selling
    Stockholder.

                                       35


<PAGE>



                         DESCRIPTION OF CAPITAL STOCK

     The authorized capital stock of the Company consists of 20,000,000 shares
of Common Stock and 5,000,000 shares of Preferred Stock.

     The following summary of certain provisions of the Common Stock and
Preferred Stock does not purport to be complete and is subject to, and qualified
in its entirety by, the provisions of the Company's Certificate of Incorporation
that are included as an exhibit to the Registration Statement of which this
Prospectus is a part, and by the provisions of applicable law.

Common Stock

     As of March 31, 1997, there were 3,790,591 shares of Common Stock
outstanding that were held of record by 17 stockholders. Prior to the offering,
the Company will issue an additional 300,443 shares of its Common Stock in
exchange for the minority interests in the Company's three subsidiaries (the
"Exchange"). Giving effect to the sale of the shares of Common Stock offered by
the Company in the offering and the shares to be issued in the Exchange, there
will be 5,911,034 shares of Common Stock outstanding immediately following the
offering.

     Holders of Common Stock are entitled to one vote per share, to receive
dividends when and if declared by the Board of Directors and to share ratably in
the assets of the Company legally available for distribution to its stockholders
in the event of liquidation. Holders of Common Stock have no preemptive,
subscription, redemption or conversion rights. All outstanding shares of Common
Stock are, and the shares to be sold hereby will be, upon issuance and payment
therefor, duly authorized, fully paid and nonassessable. The holders of Common
Stock do not have cumulative voting rights. The holders of a majority of the
shares of Common Stock can elect all the directors and can control the
management and affairs of the Company. The rights, preferences and privileges of
holders of Common Stock will be subject to the rights of the holders of any
series of Preferred Stock that the Company may issue in the future.

Preferred Stock

     The Company has an authorized class of undesignated Preferred Stock
consisting of 5,000,000 shares. Preferred Stock may be issued in series from
time to time with such designations, relative rights, priorities, preferences,
qualifications, limitations and restrictions thereof, to the extent that such
are not fixed in the Company's Certificate of Incorporation, as the Board of
Directors determines. The rights, priorities, preferences, qualifications,
limitations and restrictions of different series of Preferred Stock may differ
with respect to dividend rates, amounts payable on liquidation, voting rights,
conversion rights, redemption provisions, sinking fund provisions and other
matters. The Board of Directors may authorize the issuance of Preferred Stock
which ranks senior to the Common Stock with respect to the payment of dividends
and the distribution of assets on liquidation. In addition, the Board of
Directors is authorized to fix the limitations and restrictions, if any, upon
the payment of dividends on Common Stock to be effective while any shares of
Preferred Stock are outstanding. The Board of Directors, without stockholder
approval, can issue Preferred Stock with voting and conversion rights which
could adversely affect the voting power of the holders of Common Stock. The
issuance of Preferred Stock may have the effect of delaying, deferring or
preventing a change of control of the Company. Upon consummation of the
offering, no shares of Preferred Stock will be outstanding. The Company has no
present intention to issue shares of Preferred Stock.

Certain Corporate Provisions

     The Company's Certificate of Incorporation and Bylaws contain a number of
provisions relating to corporate governance and to the rights of stockholders.
Certain of these provisions may be deemed to have a potential "anti-takeover"
effect in that such provisions may delay, defer or prevent a change of control
of the Company. These provisions include the authority of the Board of Directors
to issue series of Preferred Stock with such voting rights and other powers as
the Board of Directors may determine. See "Management -- Executive Officers,
Directors and Significant Employees."

                                       36


<PAGE>


     The Company is subject to the provisions of the DGCL. Section 203 of the
DGCL prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
A "business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested stockholder. Subject to
certain exceptions, an "interested stockholder" is a person who, together with
affiliates, owns, or within three years did own, 15 percent or more of the
corporation's voting stock.

Transfer Agent and Registrar

   The transfer agent and registrar for the Company's Common Stock is The First
National Bank of Boston.

                        SHARES ELIGIBLE FOR FUTURE SALE

     Prior to the offering, there has been no public market for the Company's
Common Stock. Future sales of substantial amounts of Common Stock in the public
market could adversely affect the prevailing market prices.

     Upon completion of the offering, there will be 5,911,034 shares of Common
Stock of the Company outstanding, of which 3,338,078 will be "restricted
securities" and may be publicly sold only if registered under the Securities Act
or sold in accordance with an applicable exemption from registration, such as
Rule 144.

     In general, under Rule 144 as currently in effect, a stockholder, including
an "affiliate" of the Company, as that term is defined in Rule 144 (an
"Affiliate"), who has beneficially owned his or her restricted securities (as
that term is defined in Rule 144) for at least one year from the later of the
date such securities were acquired from the Company or (if applicable) the date
they were acquired from an Affiliate, is entitled to sell, within any
three-month period, a number of such shares that does not exceed the greater of
one percent of the then outstanding shares of Common Stock (approximately 59,110
shares immediately after the offering) or the average weekly trading volume in
the Common Stock during the four calendar weeks preceding the date on which
notice of such sale was filed under Rule 144, provided certain requirements
concerning availability of public information, manner of sale and notice of sale
are satisfied. In addition, under Rule 144(k), if a period of at least two years
has elapsed between the later of the date restricted securities were acquired
from the Company and the date they were acquired from an Affiliate of the
Company, a stockholder who is not an Affiliate of the Company at the time of
sale and has not been an Affiliate for at least three months prior to the sale
would be entitled to sell the shares immediately without compliance with the
foregoing requirements under Rule 144.

     As of the date of this Prospectus, the Company and each of its stockholders
have agreed that they will not directly or indirectly, offer, sell, offer to
sell, grant any option to purchase or otherwise sell or dispose (or approve any
offer, sale, offer of sale, grant of any options to purchase or sale or
disposition) of any shares of Common Stock or other capital stock of the
Company, or any securities convertible into, or exercisable or exchangeable for,
any shares of Common Stock or other capital stock of the Company without the
prior written consent of Janney Montgomery Scott Inc., on behalf of the
Underwriters, for a period of 180 days from the date of this Prospectus (the
"Lock-up Agreements"). Beginning 180 days after the date of this Prospectus,
approximately 297,841 shares of Common Stock will become eligible for resale
without volume or other limitations pursuant to Rule 144.

     An additional 500,000 shares of Common Stock in the aggregate are reserved
for future issuance under the 1997 Stock Plan, and options to purchase a total
of 150,000 shares are expected to be granted as of the date of this Prospectus.
The Company intends to file a registration statement under the Act shortly after
the effective date of the Registration Statement, of which this Prospectus forms
a part, covering certain shares of Common Stock reserved for issuance under the
1997 Stock Plan. Upon the effectiveness of that Registration Statement, most of
the shares of Common Stock which may be issued pursuant to the 1997 Stock Plan,
other than shares held by Affiliates, will be immediately eligible for resale in
the public market without restriction, subject to the terms of the Lock-up
Agreements, if applicable. See "Management -- 1997 Stock Plan."

                                       37


<PAGE>



                                 UNDERWRITING

     The Underwriters named below, acting through their representatives, Janney
Montgomery Scott Inc. and Needham & Company, Inc. have severally agreed, subject
to the terms and conditions of the Underwriting Agreement, to purchase a total
of 1,820,000 shares of Common Stock from the Company and 455,000 shares of
Common Stock from the Selling Stockholders. The number of shares of Common Stock
that each Underwriter has agreed to purchase is set forth opposite its name
below. The Underwriters are committed to purchase all of such shares if any are
purchased. Under certain circumstances, the commitments of non-defaulting
Underwriters may be increased. The names of the several Underwriters and the
respective number of shares to be purchased by each of them are as follows:

                                         Number of
 Underwriter                              Shares
- --------------------------------------  -----------
 Janney Montgomery Scott Inc.   ......
 Needham & Company, Inc.  ............
                                        -----------
 Total  ..............................   2,275,000
                                        ===========

     The Company is obligated to sell, and the Underwriters are obligated to
purchase, all of the shares of Common Stock offered hereby if any are purchased.

     The Underwriters, through their Representatives, have advised the Company
and the Selling Stockholders that they propose to offer the Common Stock
initially at the public offering price set forth on the cover page of this
Prospectus; that the Underwriters may allow to selected dealers a concession of
$     per share; and that such dealers may reallow a concession of $       per
share to certain other dealers. After the initial public offering, the offering
price and the concessions may be changed by the Representatives.

     The Selling Stockholders have granted to the Underwriters an option,
exercisable for 30 days from the date of this Prospectus, to purchase up to
341,250 additional shares of Common Stock at the initial public offering price,
less underwriting discounts and commissions, as set forth on the cover page of
this Prospectus. The Underwriters may exercise such option solely for the
purpose of covering over-allotments incurred in the sale of the shares of Common
Stock offered hereby. To the extent such option to purchase is exercised, each
Underwriter will become obligated, subject to certain conditions, to purchase
approximately the same percentage of such additional shares as the number set
forth next to such Underwriter's name in the preceding table bears to 2,275,000.

     The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters or contribute to losses arising out of certain liabilities,
including liabilities under the Securities Act.

     As of the date of this Prospectus, the Company, its officers and directors,
and stockholders of the Company holding 3,636,034 shares of Common Stock upon
completion of the offering, have agreed that they will not, directly or
indirectly, offer, sell, offer to sell, grant any option to purchase or
otherwise sell or dispose (or approve any offer, sale, offer of sale, grant of
any options to purchase or sale or disposition) of any shares of Common Stock or
other capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for, any shares of Common Stock or other capital
stock of the Company without the prior written consent of Janney Montgomery
Scott Inc., for a period of 180 days from the date of this Prospectus. See
"Shares Eligible for Future Sale."

     The Representatives have informed the Company that the Underwriters do not
intend to confirm sales to any accounts over which they exercise discretionary
authority.

     Prior to the offering, there has been no public market for the Common Stock
of the Company. Consequently, the initial public offering price will be
determined through negotiations among the Company and the Representatives. Among
the factors considered in making such determination are the prevailing market
conditions, the Company's financial and operating history and condition, its
prospects and the prospects for its industry in general, the management of the
Company, and the market prices of securities for companies in businesses similar
to that of the Company.

                                       38


<PAGE>



                                 LEGAL MATTERS

     The legality of the issuance of the shares of Common Stock being offered
hereby will be passed upon for the Company and the Selling Stockholders by Saul,
Ewing, Remick & Saul, Philadelphia, Pennsylvania. Certain legal matters in
connection with patent law matters will be passed upon for the Company by Ratner
& Prestia, Berwyn, Pennsylvania. Certain legal matters will be passed upon for
the Underwriters by Pepper, Hamilton & Scheetz LLP, Philadelphia, Pennsylvania.


                                    EXPERTS

     The Consolidated Financial Statements of the Company as of December 31,
1996 and 1995 and for each of the years in the three-year period ended December
31, 1996, have been included herein and in the Registration Statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing.

     Certain matters dealing with patents and proprietary rights set forth under
"Risk Factors -- Importance of Patents and Proprietary Rights; Risk of
Litigation," "Business -- Strategy -- Capitalize on Experience and Expertise"
and "Business -- Patents and Other Proprietary Rights" have been included in
this Prospectus in reliance upon the written opinion of Ratner & Prestia,
Berwyn, Pennsylvania, patent counsel for the Company, as experts in such
matters.

                            ADDITIONAL INFORMATION

     The Company is not currently subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). As a result of
the offering, the Company will be required to file reports and other information
with the Securities and Exchange Commission (the "Commission") pursuant to the
informational requirements of the Exchange Act.

     The Company has filed with the Commission a Registration Statement on Form
S-1 under the Act with respect to the Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. Statements contained in this
Prospectus as to the contents of any contract or other document referred to are
not necessarily complete and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. For further information, reference is made to the Registration
Statement and exhibits thereto. The Registration Statement may be inspected
without charge at the Office of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of the Registration Statement may be obtained
from the Commission at prescribed rates from the Public Reference Section of the
Commission at such address, and at the Commission's regional offices located at
7 World Trade Center, Suite 1300, New York, New York 10048, and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. In
addition, registration statements and certain other filings made with the
Commission through its Electronic Data Gathering, Analysis, and Retrieval
("EDGAR") system are publicly available through the Commission's site on the
Internet's World Wide Web, located at http://www.sec.gov. The Registration
Statement, including all exhibits thereto and amendments thereof, has been filed
with the Commission through EDGAR.

     The Company intends to furnish to its stockholders annual reports
containing financial statements audited by an independent accounting firm.

                                       39


<PAGE>


                              inTEST CORPORATION
                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                 Page
                                                                ------
Report of KPMG Peat Marwick LLP, Independent Auditors  ......    F-2
Consolidated Financial Statements:
 Consolidated Balance Sheets   ..............................    F-3
 Consolidated Statements of Earnings ........................    F-4
 Consolidated Statements of Stockholders' Equity ............    F-5
 Consolidated Statements of Cash Flows  .....................    F-6
 Notes to Consolidated Financial Statements   ...............    F-7


                                      F-1


<PAGE>


When the transaction referred to in the first paragraph of Note 12 of the notes
to consolidated financial statements has been consummated, we will be in a
position to render the following report.

                                                      /s/ KPMG Peat Marwick LLP



Independent Auditors' Report

The Board of Directors and Stockholders
inTEST Corporation and Subsidiaries:

We have audited the accompanying consolidated balance sheets of inTEST
Corporation and subsidiaries as of December 31, 1995 and 1996, and the related
consolidated statements of earnings, stockholders' equity, and cash flows for
each of the years in the three-year period ended December 31, 1996. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of inTEST Corporation
and subsidiaries at December 31, 1995 and 1996, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1996, in conformity with generally accepted accounting
principles.



Philadelphia, Pennsylvania
 March 14, 1997, except for Note 12,

 as to which the date is April 25, 1997
 

                                      F-2


<PAGE>


                      inTEST CORPORATION AND SUBSIDIARIES
                          Consolidated Balance Sheets
                     (in thousands, except for share data)


<TABLE>
<CAPTION>
                                                             December 31,                 March 31, 1997
                                                        -----------------------   ------------------------------
                                                                                                   Pro forma
                                                                                    Actual          (Note 3)
                                                         1995         1996        (unaudited)      (unaudited)
                                                        ----------   ----------   --------------   -------------
<S>                                                     <C>          <C>          <C>              <C>
Current assets:
 Cash and cash equivalents   ........................     $  1,919     $ 3,692        $ 2,983          $ 2,983
 Trade accounts and notes receivable, net of
   allowance for doubtful accounts of $42 at
   December 31, 1995 and $88 at December 31,
   1996 and March 31, 1997  .........................        2,992       1,953          2,495            2,495
 Inventories  .......................................        1,218       1,313          1,178            1,178
 Deferred tax asset    ..............................           --          --             --               56
 Other current assets  ..............................           11          70            167              167
                                                           --------     -------       -------          -------
Total current assets   ..............................        6,140       7,028          6,823            6,879
                                                           --------     -------       -------          -------
Property and equipment:
 Machinery and equipment  ...........................          633       1,096          1,082            1,082
 Leasehold improvements   ...........................           55         173            169              169
                                                           --------     -------       -------          -------
                                                               688       1,269          1,251            1,251
 Accumulated depreciation    ........................         (547)       (676)          (701)            (701)
                                                           --------     -------       -------          -------
Net property and equipment   ........................          141         593            550              550
                                                           --------     -------       -------          -------
Other assets  .......................................           71          95            119              119
Goodwill (Note 3)   .................................           --          --             --            1,567
                                                           --------     -------       -------          -------
Total assets  .......................................     $  6,352     $ 7,716        $ 7,492          $ 9,115
                                                           ========     =======       =======          =======
Current liabilities:
 Current installments of long term debt  ............     $     --     $    34        $    34          $    34
 Accounts payable   .................................          845         574            837              837
 Dividends payable  .................................           --         973          1,216            1,216
 Accrued wages and expenses  ........................          299         595            427              427
 Customer deposits  .................................          191          --             --               --
 State and foreign income taxes payable  ............          604         475            385              385
 S corporation distribution to stockholders (Note 3)            --          --             --            3,420
                                                           --------     -------       -------          -------
Total current liabilities    ........................        1,939       2,651          2,899            6,319
                                                           --------     -------       -------          -------
Long term debt   ....................................           --         155            148              148
Deferred tax liability    ...........................           --          --             --                8
Minority interest   .................................          365         323            291               --
                                                           --------     -------       -------          -------
Commitments (Note 8)
Stockholders' equity:
 Preferred stock, $0.01 par value; 5,000,000 shares
   authorized; no shares issued or outstanding   ....           --          --             --               --
 Common stock, $0.01 par value; 20,000,000
   shares authorized; 3,790,591 shares issued and
   outstanding at December 31, 1995 and 1996 and
   March 31, 1997; 4,091,034 shares issued and
   outstanding pro forma    .........................           38          38             38               41
 Additional paid-in capital  ........................          689         689            689            2,544
 Retained earnings  .................................        3,273       3,833          3,461               89
 Foreign currency translation adjustment    .........           48          27            (34)             (34)
                                                           --------     -------       -------          -------
Total stockholders' equity   ........................        4,048       4,587          4,154            2,640
                                                           --------     -------       -------          -------
Total liabilities and stockholders' equity  .........     $  6,352     $ 7,716        $ 7,492          $ 9,115
                                                           ========     =======       =======          =======
</TABLE>



          See accompanying Notes to Consolidated Financial Statements.

                                      F-3


<PAGE>


                      inTEST CORPORATION AND SUBSIDIARIES

                      Consolidated Statements of Earnings

                   (in thousands, except for per share data)


<TABLE>
<CAPTION>
                                                                                                   Three months ended
                                                             Years ended December 31,                   March 31,
                                                      ------------------------------------   ------------------------------
                                                                                                 1996             1997
                                                        1994         1995         1996        (unaudited)      (unaudited)
                                                      ----------   ----------   ----------   --------------   -------------
<S>                                                   <C>          <C>          <C>          <C>              <C>
Revenues    .......................................   $  9,287     $ 14,442     $ 18,582       $ 6,089          $ 3,887
Cost of revenues  .................................      3,777        5,191        6,755         1,856            1,602
                                                       --------     --------     --------      -------          -------
Gross profit   ....................................      5,510        9,251       11,827         4,233            2,285
                                                       --------     --------     --------      -------          -------
Operating expenses:
 Selling expense  .................................      1,491        2,118        2,471           781              493
 Research and development expense   ...............      1,623        1,930        1,928           394              374
 General and administrative expense    ............      1,107        1,166        1,812           364              411
                                                       --------     --------     --------      -------          -------
Total operating expenses   ........................      4,221        5,214        6,211         1,539            1,278
                                                       --------     --------     --------      -------          -------
Operating income  .................................      1,289        4,037        5,616         2,694            1,007
                                                       --------     --------     --------      -------          -------
Other income (expense):
 Interest income  .................................         22           82          147            23               29
 Interest expense    ..............................         (9)          --          (11)           (5)              (4)
 Other   ..........................................         24          (49)         (35)           (6)             (10)
                                                       --------     --------     --------      -------          -------
                                                            37           33          101            12               15
                                                       --------     --------     --------      -------          -------
Earnings before income taxes and minority interest       1,326        4,070        5,717         2,706            1,022
                                                       --------     --------     --------      -------          -------
Provision for income taxes:
 State   ..........................................          9           82          126            75               21
 Foreign    .......................................        373          555          732           280              146
                                                       --------     --------     --------      -------          -------
Income tax expense   ..............................        382          637          858           355              167
                                                       --------     --------     --------      -------          -------
Earnings before minority interest   ...............        944        3,433        4,859         2,351              855
Minority interest    ..............................       (127)        (181)        (213)          (94)             (11)
                                                       --------     --------     --------      -------          -------
Net earnings   ....................................   $    817     $  3,252     $  4,646       $ 2,257          $   844
                                                       ========     ========     ========      =======          =======
Pro forma information (unaudited) (Note 3):
 Pro forma earnings before income taxes   .........   $     --     $     --     $  5,613       $    --          $   996
 Pro forma income taxes ...........................         --           --        2,247            --              459
 Pro forma net earnings    ........................         --           --        3,366            --              537
 Pro forma net earnings per share   ...............   $     --     $     --     $   0.82       $    --          $  0.13
 Pro forma weighted average shares outstanding ....         --           --        4,091            --            4,091
                                                       ========     ========     ========      =======          =======
</TABLE>



          See accompanying Notes to Consolidated Financial Statements.

                                      F-4


<PAGE>


                      inTEST CORPORATION AND SUBSIDIARIES

                 Consolidated Statement of Stockholders' Equity

                     (in thousands, except for share data)


<TABLE>
<CAPTION>
                                                                      
                                                   Common Stock           Additional
                                              ------------------------     paid-in
                                                 Shares       Amount       capital
                                              ------------  ---------  -------------
<S>                                           <C>           <C>        <C>
Balance, January 1, 1994  ..................    3,720,486      $37           $639
Dividends  .................................           --       --             --
Net earnings  ..............................           --       --             --
Shares issued as compensation for
 services  .................................        7,789       --              5
Foreign currency translation adjustment  .             --       --             --
                                               -----------     ----         -----
Balance, December 31, 1994   ...............    3,728,275       37            644
Dividends  .................................           --       --             --
Net earnings  ..............................           --       --             --
Shares issued as compensation for
 services  .................................       62,316        1             45
Foreign currency translation adjustment  .             --       --             --
                                               -----------     ----         -----
Balance, December 31, 1995   ...............    3,790,591       38            689
Dividends  .................................           --       --             --
Net earnings  ..............................           --       --             --
Foreign currency translation adjustment  .             --       --             --
                                               -----------     ----         -----
Balance, December 31, 1996   ...............    3,790,591       38            689
Dividends (unaudited)  .....................           --       --             --
Net earnings (unaudited)  ..................           --       --             --
Foreign currency translation adjustment
 (unaudited)  ..............................           --       --             --
                                               -----------     ----         -----
Balance, March 31, 1997 (unaudited)   ......    3,790,591      $38           $689
                                               ===========     ====         =====



<CAPTION>
                                                           Foreign currency     Total stock-
                                              Retained        translation         holders'
                                              earnings        adjustment           equity
                                              -----------  -------------------  --------------
<S>                                           <C>          <C>                  <C>
Balance, January 1, 1994  ..................  $  1,821        $  (49)            $  2,448
Dividends  .................................      (642)           --                 (642)
Net earnings  ..............................       817            --                  817
Shares issued as compensation for
 services  .................................        --            --                    5
Foreign currency translation adjustment  .          --           137                  137
                                               --------       ------             --------
Balance, December 31, 1994   ...............     1,996            88                2,765
Dividends  .................................    (1,975)           --               (1,975)
Net earnings  ..............................     3,252            --                3,252
Shares issued as compensation for
 services  .................................        --            --                   46
Foreign currency translation adjustment  .          --           (40)                 (40)
                                               --------       ------             --------
Balance, December 31, 1995   ...............     3,273            48                4,048
Dividends  .................................    (4,086)           --               (4,086)
Net earnings  ..............................     4,646            --                4,646
Foreign currency translation adjustment  .          --           (21)                 (21)
                                               --------       ------             --------
Balance, December 31, 1996   ...............     3,833            27                4,587
Dividends (unaudited)  .....................    (1,216)           --               (1,216)
Net earnings (unaudited)  ..................       844            --                  844
Foreign currency translation adjustment
 (unaudited)  ..............................        --           (61)                 (61)
                                               --------       ------             --------
Balance, March 31, 1997 (unaudited)   ......  $  3,461        $  (34)            $  4,154
                                               ========       ======             ========
</TABLE>



          See accompanying Notes to Consolidated Financial Statements.

                                      F-5


<PAGE>


                      inTEST CORPORATION AND SUBSIDIARIES

                     Consolidated Statements of Cash Flows

                           (in thousands of dollars)


<TABLE>
<CAPTION>
                                                           Years ended December 31,        Three months ended March 31,
                                                     ------------------------------------  -----------------------------
                                                        1994        1995         1996          1996           1997
                                                     ----------  -----------  -----------  --------------  -------------
                                                                                           (unaudited)     (unaudited)
<S>                                                  <C>         <C>          <C>          <C>             <C>
Cash flows from operating activities:
 Net earnings......................................  $    817    $  3,252     $  4,646       $  2,257       $    844
 Adjustments to reconcile net earnings to net cash
   Depreciation and amortization ..................        59          36          109             11             41
   Foreign exchange (gain) loss ...................       (25)         43           31             (3)            (3)
   Minority interest ..............................       127         181          213             94             11
   Stock issued for services received .............         5          46           --             --             --
   Changes in assets and liabilities:
   Accounts receivable ............................      (544)       (850)       1,182         (1,321)          (684)
   Inventories ....................................        58        (284)         (66)           (80)            97  
   Other current assets ...........................        (4)        (46)         (61)           (56)          (123)
   Notes receivable ...............................       (68)       (170)        (216)           100             42

   Accounts payable ...............................       203         342         (235)           753            307
   State and foreign income tax payable  ..........       249         261         (118)          (105)           (72)
   Accrued expenses ...............................        54          35           50            204           (129)
   Other assets ...................................        45        (101)         (65)            --             --
                                                      --------    --------     --------      --------         --------
Total adjustments .................................       159        (507)         824           (403)          (513)
                                                      --------    --------     --------      --------         --------
Net cash provided by operations ...................       976       2,745        5,470          1,854            331
                                                      --------    --------     --------      --------         --------
Cash flows used in investing activities:
 Purchase of property and equipment ...............       (38)        (39)        (554)           (13)            (5)
                                                      --------    --------     --------      --------         --------
Net cash used in investing activities .............       (38)        (39)        (554)           (13)            (5)
                                                      --------    --------     --------      --------         --------
Cash flows used in financing activities:
 Dividends paid ...................................      (642)     (1,976)      (3,339)          (186)        (1,001)
 Proceeds from long term debt .....................        --          --          200             --             --
 Principal payments on debt .......................       (71)         (8)         (11)            --             (8)
                                                      --------    --------     --------      --------         --------
Net cash used in financing activities  ............      (713)     (1,984)      (3,150)          (186)        (1,009)
                                                      --------    --------     --------      --------         --------
Effects of exchange rates on cash .................        77        (139)           7             (6)           (26)
                                                      --------    --------     --------      --------         --------
Net cash provided by all activities ...............       302         583        1,773          1,649           (709)
 Cash at beginning of period ......................     1,034       1,336        1,919          1,919          3,692
                                                      --------    --------     --------      --------         --------
 Cash at end of period ............................  $  1,336    $  1,919     $  3,692       $  3,568       $  2,983
                                                      ========    ========     ========      ========         ========
Cash payments made for:
 State and foreign income taxes ...................  $    122    $    374     $    977       $    471       $    241
 Interest .........................................        13           9           11              5              4
</TABLE>



          See accompanying Notes to Consolidated Financial Statements.

                                      F-6


<PAGE>


                      inTEST CORPORATION AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements

       (Information as of March 31, 1997 and for the three months ended
                     March 31, 1996 and 1997 is unaudited)
                     (in thousands, except for share data)

(1) Nature of Operations

     inTEST Corporation ("the Company") designs, manufactures and markets
docking hardware and test head manipulators used by semiconductor manufacturers
during the testing of wafers and packaged devices. The Company also designs and
markets related automatic test equipment interface products. The Company
operates in a single industry segment.

     The consolidated entity is comprised of inTEST Corporation (parent) and
three 79% owned foreign subsidiaries: inTEST Limited (Thame, U.K.), inTEST
Kabushiki Kaisha (Kichijoji, Japan) and inTEST PTE, Limited (Singapore). All
significant intercompany accounts and transactions have been eliminated upon
consolidation.

     inTEST manufactures its products in the U.S. and the U.K. Its subsidiaries
in Singapore and Japan are engaged in marketing and support activities.

(2) Summary of Significant Accounting Policies

     Use of Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

     Cash and Cash Equivalents

     Short term investments, which have maturities of three months or less when
purchased, are considered to be cash equivalents and are carried at cost, which
approximates market value.

     Notes Receivable

     Notes receivable are due from trade customers, and have original maturities
of less than three months. The notes are non-interest bearing.

     Inventories

     Inventories are stated at lower of cost or market. Cost is determined under
the first-in first-out (FIFO) method.

     Property and Equipment

     Machinery and equipment are stated at cost. Depreciation is based upon the
estimated useful life of the assets using the straight line method. The
estimated useful lives range from five to seven years. Leasehold improvements
are recorded at cost and amortized over the shorter of the lease term or
estimated useful life of the asset. Expenditures for maintenance and repairs are
charged to operations as incurred.

     Income Taxes

     The Company has elected S corporation status for Federal tax purposes, and
in the State of New Jersey. As a result, any Federal and certain New Jersey
state income tax liabilities are that of the stockholders, not of the Company.
The Company is, however, taxed in foreign countries and for activity in certain
states.

     No foreign or state deferred income taxes have been recorded in the
Company's historical financial statements at December 31, 1995 and 1996 as such
amounts are not significant.

                                      F-7


<PAGE>

                      inTEST CORPORATION AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

       (Information as of March 31, 1997 and for the three months ended
                     March 31, 1996 and 1997 is unaudited)
                     (in thousands, except for share data)

(2) Summary of Significant Accounting Policies  -- (Continued)


     Revenue Recognition

     Revenues from sales of products are recognized upon shipment to customers.

     Research and Development

     Research and development costs are expensed as incurred.

     Product Warranties

     The Company generally provides product warranties and records estimated
warranty expense at time of sale based upon historical claims experience.

     Foreign Currency

     The accounts of the foreign subsidiaries are translated in accordance with
Statement of Financial Accounting Standard No. 52, Foreign Currency Translation,
which requires that assets and liabilities of international operations be
translated using the exchange rate in effect at the balance sheet date. The
results of operations are translated using an average exchange rate for the
year. The effects of rate fluctuations in translating assets and liabilities of
international operations into U.S. dollars are accumulated and reflected as a
foreign currency translation adjustment in the statements of stockholders'
equity. Transaction gains and losses are included in net earnings.

     Recently Adopted Accounting Standards

     The Company adopted the provisions of SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, on
January 1, 1996. This Statement requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. Adoption of this Statement had no impact on the Company's financial
position, results of operations, or liquidity.

(3) Pro forma Information (Unaudited)

     Background

     In connection with the initial public offering transaction described in
Note 12, the Company plans to terminate its S corporation status and make a
final distribution of previously taxed earnings to its stockholders. In
addition, the Company intends to acquire the minority interest ownership
position in its three foreign subsidiaries in a share exchange transaction.
Accordingly, the accompanying financial statements include certain pro forma
information which gives effect to these events as further explained below.

   Pro forma Balance Sheet

   The pro forma balance sheet of the Company as of March 31, 1997 reflects:

     a) the estimated net deferred income taxes of $48 which will be recorded by
          the Company as a result of the termination of its S corporation status
          shortly before the closing of the offering.

     b) an estimated distribution of $3,420 payable to the stockholders of all
          taxed but undistributed S corporation earnings.

                                      F-8


<PAGE>

                      inTEST CORPORATION AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

       (Information as of March 31, 1997 and for the three months ended
                     March 31, 1996 and 1997 is unaudited)
                     (in thousands, except for share data)

(3) Pro forma Information (Unaudited)  -- (Continued)


     c) the acquisition of the minority interests in the Company's foreign
          subsidiaries expected to occur concurrent with the closing of the
          offering, and the estimated goodwill of $1,567 associated with such
          acquisitions.

     The Company expects to issue 300,443 shares of common stock in exchange for
the 21% interest in each of its foreign subsidiaries which is not presently
owned by the Company. The shares, exclusive of those to be issued to the
Company's principal stockholder who is also a stockholder of two of the foreign
subsidiaries, have been valued at the assumed initial public offering price of
$9.50 per share to the extent such shares are freely transferable. Approximately
225,000 of the shares being exchanged are subject to contractual and legal
restrictions on transfer and have been valued at a 25% discount to the assumed
initial public offering price.

     The deferred income tax asset will represent the tax effect of the
cumulative differences between the financial reporting and income tax bases of
certain assets and liabilities as of the termination of the S corporation
status.

     The significant items comprising the Company's pro forma net deferred
income tax assets and liabilities as of March 31, 1997 are as follows:

 Allowance for bad debts    .........    $ 32
 Inventory capitalized costs   ......       2
 Accrued expenses  ..................      22
                                         -----
 Total net current assets   .........      56
 Fixed assets   .....................      (8)
                                         -----
 Net deferred tax asset  ............    $ 48
                                         =====

     Since the Company does not intend to repatriate the earnings of its foreign
subsidiaries, no deferred taxes have been recorded on such amounts, which
approximate $975 at March 31, 1997.

     Pro forma Statement of Earnings Information

     Shortly before the closing of the offering, the Company will terminate its
status as an S corporation and will be subject to Federal and additional state
income taxes thereafter. Accordingly, for informational purposes, the statement
of earnings for the year ended December 31, 1996 and the quarter ended March 31,
1997 reflects pro forma earnings on an after-tax basis, assuming the Company had
been taxed as a C corporation. The difference between the Federal statutory
income tax rate and the pro forma income tax rate was as follows:


<TABLE>
<CAPTION>
                                                   Year ended          Three months ended
                                                December 31, 1996       March 31, 1997
                                                --------------------   --------------------
<S>                                             <C>                    <C>
 Federal statutory tax rate   ...............              34%                    34%
 State income taxes, net of Federal benefit                 3                      3
 Foreign income taxes   .....................               3                      7
 Nondeductible goodwill amortization   ......               1                      1
 Research credits    ........................              (1)                    --
 Other   ....................................              --                      1
                                                        -----                  -----
 Pro forma income tax rate    ...............              40%                    46%
                                                        =====                  =====
</TABLE>


                                      F-9


<PAGE>

                      inTEST CORPORATION AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

       (Information as of March 31, 1997 and for the three months ended
                     March 31, 1996 and 1997 is unaudited)
                     (in thousands, except for share data)

(3) Pro forma Information (Unaudited)  -- (Continued)


     In addition, the unaudited pro forma results for the year ended December
31, 1996 and the quarter ended March 31, 1997 also reflect goodwill amortization
resulting from the acquisition of minority interests in foreign subsidiaries,
net of the elimination of the minority interest charge reflected in the
historical financial statements, as if the acquisition had occurred on January
1, 1996. The goodwill resulting from the acquisition is assumed to be amortized
over 15 years.

     Pro forma Earnings Per Share

     Pro forma earnings per share was calculated by dividing pro forma net
earnings by the weighted average number of shares of common stock outstanding
during the period, adjusted to give effect to shares to be exchanged to acquire
the minority interests in foreign subsidiaries as if this transaction had
occurred on January 1, 1996.

(4) Foreign Operations

     The Company operates in a single business segment. However, foreign
operations represent a significant portion of the Company's activity. The
following is a summary of operations by entities located within the indicated
geographic areas:


<TABLE>
<CAPTION>
                                                                                   Three months ended
                                                 Years ended December 31,               March 31,
                                          ------------------------------------   ----------------------
                                             1994         1995         1996         1996         1997
                                          ----------   ----------   ----------   ----------   ---------
<S>                                       <C>          <C>          <C>          <C>          <C>
Sales to unaffiliated customers from:
 North America    .....................    $ 4,299      $ 7,409      $10,614      $ 3,672       $ 2,433
 Far East   ...........................      2,560        4,862        4,860        1,359         1,108
 United Kingdom   .....................      2,428        2,171        3,108        1,058           346
                                           --------     --------     --------     --------     --------
                                           $ 9,287      $14,442      $18,582      $ 6,089       $ 3,887
                                           ========     ========     ========     ========     ========
Affiliate sales or transfers from:
 North America ........................    $ 1,000      $ 1,596      $ 1,321      $   559       $    81
 Far East   ...........................         --           --           --           --            --
 United Kingdom   .....................         --          451           54           48            50
                                           --------     --------     --------     --------     --------
                                           $ 1,000      $ 2,047      $ 1,375      $   607       $   131
                                           ========     ========     ========     ========     ========
Operating profit:
 North America ........................    $   338      $ 2,610      $ 3,815      $ 1,932       $   790
 Far East   ...........................        182          612          432          187            66
 United Kingdom   .....................        769          815        1,369          575           151
                                           --------     --------     --------     --------     --------
                                           $ 1,289      $ 4,037      $ 5,616      $ 2,694       $ 1,007
                                           ========     ========     ========     ========     ========
Identifiable assets:
 North America    .....................    $ 1,920      $ 3,327      $ 5,408      $ 5,561       $ 4,974
 Far East   ...........................      1,088        1,408        1,409        1,752         1,536
 United Kingdom   .....................      1,616        1,617          899        1,711           982
                                           --------     --------     --------     --------     --------
                                           $ 4,624      $ 6,352      $ 7,716      $ 9,024       $ 7,492
                                           ========     ========     ========     ========     ========
</TABLE>


     Amounts for the Far East consist of activities in the Company's Singapore
and Japan subsidiaries.

     Export sales from the Company's New Jersey location totaled $591, $2,777,
and $3,486 during the years ended December 31, 1994, 1995, and 1996,
respectively, and $1,528 and $196 during the three months ended March 31, 1996
and 1997, respectively.

                                      F-10


<PAGE>

                      inTEST CORPORATION AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

       (Information as of March 31, 1997 and for the three months ended
                     March 31, 1996 and 1997 is unaudited)
                     (in thousands, except for share data)

(4) Foreign Operations  -- (Continued)


     The Company's foreign subsidiaries paid directors fees to several
individuals who are members of management of the parent company which totaled
$49, $151, and $192 during the years ended December 31, 1994, 1995, and 1996,
respectively.

(5) Concentrations of Credit Risk

     The Company's customers are in the semiconductor industry. During 1994,
1995, and 1996 the Company had sales to certain customers which exceeded 10% of
the Company's consolidated revenues. Those sales were as follows:

 Customer        1994      1995      1996
- -----------     ------    ------    ------
 A   ......        7%       16%       16%
 B   ......       12         3         9
 C   ......       14        11         8
 D   ......       16        12         7

     Additionally, at December 31, 1996, these four customers accounted for 27%
of trade receivables.

(6) Inventories

     Inventories held at December 31 were comprised of the following:

                               1995        1996
                             -------      ------
 Raw materials  .........    $ 1,075      $1,145
 Work in process   ......         20          44
 Finished goods    ......        123         124
                             --------     -------
                             $ 1,218      $1,313
                             ========     =======

(7) Debt

     In 1996, the Company financed a purchase of equipment with a term note. The
note bears interest at a fixed rate of 8.65%, and is to be paid in equal monthly
installments of $4 through August, 2001. At December 31, 1996, $189 was
outstanding. Prior to 1996 the Company had no long term debt.

     Principal payments due within the next five years are as follows:

 1997   ......    $ 34
 1998   ......      37
 1999   ......      40
 2000   ......      44
 2001   ......      34

     Additionally, the Company has a $1,500 line of credit. Borrowings under
this line of credit are principally used for working capital purposes.
Borrowings on the line of credit bear interest at prime rate, which is payable
monthly on any outstanding balance. Further, the Company is required to maintain
a $50 compensating balance at the bank which granted the line of credit. The
credit line expires on June 30, 1997. At December 31, 1996 and March 31, 1997,
there were no borrowings outstanding.

                                      F-11


<PAGE>

                      inTEST CORPORATION AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

       (Information as of March 31, 1997 and for the three months ended
                     March 31, 1996 and 1997 is unaudited)
                     (in thousands, except for share data)


(8) Commitments

     The Company leases its offices, warehouse facilities and automobiles under
noncancelable operating leases which expire at various dates through 2003. Total
rental expense for the years ended December 31, 1994, 1995, and 1996, and the
three months ended March 31, 1996 and 1997 was $336, $388, and $422, $83, and
$115, respectively. The aggregate minimum rental commitments under the
noncancelable operating leases in effect at December 31, 1996 are as follows:

 1997   .....................   $ 346
 1998   .....................     309
 1999   .....................     275
 2000   .....................     217
 2001 and thereafter   ......     452

(9) Income Taxes

     As discussed in Notes 2 and 3, the Company has elected S corporation status
for Federal tax purposes, as well as certain states, and therefore is not
subject to federal income taxes directly. For those states and foreign
jurisdictions in which the Company is subject to taxes, the temporary
differences that give rise to deferred tax assets and liabilities were not
significant at December 31, 1995 and 1996, or March 31, 1997.

     Earnings before income taxes were as follows:

                                                        Three months ended
                         Years ended December 31,            March 31,
                    ---------------------------------   -------------------
                       1994       1995        1996        1996       1997
                    ---------   ---------   ---------   ---------   -------
Domestic   ......    $   345     $2,651      $3,979      $1,984     $  835
Foreign    ......        981      1,419       1,738         722        187
                     --------    -------     -------     -------    -------
                     $ 1,326     $4,070      $5,717      $2,706     $1,022
                     ========    =======     =======     =======    =======

     Income tax expense was as follows:

                                                Three months ended
                      Years ended December 31,       March 31,
                    ---------------------------   ----------------
                      1994      1995     1996       1996     1997
                    -------   -------   -------   -------   ------
Domestic   ......      $  9      $ 82   $ 126        $ 75   $ 21
Foreign    ......       373       555     732         280    146
                      -----     -----   ------      -----   -----
                       $382      $637   $ 858        $355   $167
                      =====     =====   ======      =====   =====

(10) Employee Benefit Plans

     In 1996, the Company instituted a defined contribution 401(k) plan for its
employees who work in the U.S. All employees of the parent company who are at
least 18 years of age and have completed six months of service with the Company
are eligible to participate in the plan. Under the plan, the Company matches
employee contributions dollar for dollar up to 10% of the employee's annual
compensation up to $5. In addition, the Company may match employee contributions
dollar for dollar for amounts exceeding 15% of the employee's annual
compensation to a maximum of $5. Employer contributions vest over a six-year
period. The Company contributions in 1996 totaled $71.

                                      F-12


<PAGE>

                      inTEST CORPORATION AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

       (Information as of March 31, 1997 and for the three months ended
                     March 31, 1996 and 1997 is unaudited)
                     (in thousands, except for share data)

(10) Employee Benefit Plans  -- (Continued)


     The Company sponsors a noncontributory pension plan for an employee of its
U.K. subsidiary. The Company has no other defined contribution or defined
benefit plans.

(11) Accrued Expense

     Accrued wages and expenses consist of the following:

                                   December 31,       March 31,
                                ------------------   -----------
                                  1995      1996        1997
                                --------   -------   -----------
 Accrued commissions   ......    $  113     $390        $107
 Accrued vacation   .........       101      101         101
 Other  .....................        85      104         219
                                 -------    -----       -----
                                 $  299     $595        $427
                                 =======    =====       =====

(12) Subsequent Events

     In April of 1997, the Company's Board of Directors authorized the filing of
a Registration Statement on Form S-1 in connection with a planned initial public
offering of the Company's common stock. The Company intends to effect a stock
split in the form of a stock dividend in the amount 0.5579 shares for every one
share outstanding as of the effective date of the transaction. All share and per
share information in the accompanying consolidated financial statements have
been retroactively adjusted to give effect to the planned modification to the
Company's capital structure.

     Also in April of 1997, the Company's Board of Directors reserved 500,000
shares of common stock for issuance under a newly created stock plan and also
approved the award of stock options to employees to purchase a total of 150,000
shares of common stock. The grants are to become effective on the effective date
of the Registration Statement and the options will be exercisable at a per share
price equal to the initial public offering price.

                                      F-13

                                        

<PAGE>


                              [Inside Back Cover]


<PAGE>

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

       No dealer, sales representative or any other person has been authorized
to give any information or to make any representations in connection with this
offering other than those contained in this Prospectus and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company, the Selling Stockholders or any of the Underwriters.
This Prospectus does not constitute an offer to sell or a solicitation of any
offer to buy any security other than the shares of Common Stock offered by this
Prospectus, nor does it constitute an offer to sell or a solicitation of any
offer to buy the shares of Common Stock in any jurisdiction in which such offer
or solicitation is not authorized, or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that the information contained herein is correct as of any time subsequent to
the date hereof.
                     -----------------------------------

 
                              TABLE OF CONTENTS

                                                     Page
                                                     ------
Prospectus Summary  ..............................       3
Risk Factors  ....................................       5
The Company   ....................................       9
Use of Proceeds  .................................       9
S Corporation Distributions  .....................      10
Dividend Policy  .................................      10
Capitalization   .................................      11
Dilution   .......................................      12
Selected Consolidated Financial Data  ............      13

Management's Discussion and Analysis of
 Financial Condition and Results of
 Operations   ....................................      14
Business   .......................................      20
Management .......................................      29
Principal and Selling Stockholders ...............      35
Description of Capital Stock .....................      36
Shares Eligible for Future Sale ..................      37
Underwriting  ....................................      38
Legal Matters ....................................      39
Experts ..........................................      39
Additional Information ...........................      39
Index to Consolidated Financial Statements  ......     F-1

Until _______, 1997, all dealers effecting transactions in the Common Stock
offered hereby, whether or not participating in this distribution, may be
required to deliver a Prospectus. This is in addition to the obligations of
dealers to deliver a Prospectus when acting as Underwriters and with respect to
their unsold allotments or subscriptions.

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

<PAGE>
================================================================================





                                2,275,000 Shares





                                 [COMPANY LOGO]






                                  Common Stock






                             ---------------------
                              P R O S P E C T U S
                             ---------------------




                          JANNEY MONTGOMERY SCOTT INC.

                            NEEDHAM & COMPANY, INC.







                                   ____, 1997

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

<PAGE>



 
                                   PART II
                    INFORMATION NOT REQUIRED IN PROSPECTUS


Item 13. Other Expenses of Issuance and Distribution

     Set forth below is an estimate of the approximate amount of fees and
expenses (other than underwriting commissions and discounts) payable by the
Company in connection with the issuance and distribution of the Common Stock
pursuant to the Prospectus contained in this Registration Statement. The Company
will pay all of these expenses.


<TABLE>
<CAPTION>
                                                                Approximate
                                                                  Amount
                                                                -------------
<S>                                                             <C>
 Securities and Exchange Commission registration fee   ......       $  8,324
 NASD filing fee   ..........................................          3,248
 Blue Sky expenses    .......................................          5,000
 Nasdaq company listing fee    ..............................         32,277
 Accountants fees and expenses    ...........................        150,000
 Legal fees and expenses    .................................        200,000
 Transfer Agent and Registrar fees and expenses  ............          7,000
 Printing and engraving expenses  ...........................         90,000
 Directors' and Officers' insurance  ........................        130,000
 Miscellaneous expenses  ....................................         29,151
                                                                   ---------
 Total    ...................................................       $655,000
                                                                   =========
</TABLE>



Item 14. Indemnification of Directors and Officers

     Article VI of the Company's Bylaws provides that the Company shall
indemnify its directors and officers to the fullest extent permitted by the
General Corporation Law of the State of Delaware ("DGCL"). The Bylaws require
the Company, among other things, to indemnify such directors and officers
against certain liabilities that may arise by reason of their status or service
as directors or officers, to advance expenses to them as they are incurred,
provided that they undertake to repay the amount advanced if it is ultimately
determined by a court that they are not entitled to indemnification and to
obtain directors' and officers' liability insurance if available on reasonable
terms. The Bylaws require the Company to indemnify an officer or director in
connection with a proceeding (or part thereof) initiated by such officer or
director only if the initiation of such proceeding was authorized by the Board
of Directors. Reference is made to Section 145 of the DGCL which provides for
indemnification of directors and officers in certain circumstances.

     Article IX of the Company's Certificate of Incorporation provides that a
director of the Company shall not be personally liable to the Company or its
stockholders for monetary damages for breach of his or her fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for willful or negligent conduct in paying dividends or repurchasing
stock out of other than lawfully available funds or (iv) for any transaction
from which the director derives an improper personal benefit.

     The Company has applied for an insurance policy which will entitle the
Company to be reimbursed for certain indemnity payments it is required or
permitted to make to its directors and officers.


Item 15. Recent Sales of Unregistered Securities

     On October 4, 1994, the Company issued 5,000 shares (7,789 shares after the
stock dividend to occur on the effective date of this Registration Statement
(the "Stock Dividend")) of Common Stock to William R. Blatchley in exchange for
services rendered. No underwriters were involved in the issuance of these
securities and no commissions were paid. The shares of Common Stock were issued
in reliance on the exemption from registration contained in Section 4(2) of the
Securities Act.

                                      II-1


<PAGE>


     On June 1, 1995, the Company issued 10,000 shares (15,579 shares after
giving effect to the Stock Dividend) of Common Stock to Christopher L. West in
exchange for services rendered. No underwriters were involved in the issuance of
these securities and no commissions were paid. The shares of Common Stock were
issued in reliance on the exemption from registration contained in Section 4(2)
of the Securities Act.

     On June 27, 1995, the Company issued 10,000 shares (15,579 shares after
giving effect to the Stock Dividend) of Common Stock to William R. Blatchley in
exchange for services rendered. No underwriters were involved in the issuance of
these securities and no commissions were paid. The shares of Common Stock were
issued in reliance on the exemption from registration contained in Section 4(2)
of the Securities Act.

     On June 27, 1995, the Company issued 10,000 shares (15,579 shares after
giving effect to the Stock Dividend) of Common Stock to Jerome R. Bortnam in
exchange for services rendered. No underwriters were involved in the issuance of
these securities and no commissions were paid. The shares of Common Stock were
issued in reliance on the exemption from registration contained in Section 4(2)
of the Securities Act.

     On June 27, 1995, the Company issued 10,000 shares (15,579 shares after
giving effect to the Stock Dividend) of Common Stock to Jack R. Edmunds in
exchange for services rendered. No underwriters were involved in the issuance of
these securities and no commissions were paid. The shares of Common Stock were
issued in reliance on the exemption from registration contained in Section 4(2)
of the Securities Act.

                                      II-2


<PAGE>


Item 16. Exhibits and Financial Statement Schedules.

     (a) Exhibits.


<TABLE>
<S>       <C>
 1.        Form of Underwriting Agreement.
 3.1       Certificate of Incorporation of inTEST CORP.
 3.2       Bylaws of inTEST CORP.
 4.1*      Specimen stock certificate representing Common Stock.
 5. *      Opinion of Saul, Ewing, Remick & Saul as to the legality of the securities being registered 
           (including consent).
10.1       Amended and Restated Loan Agreement, dated June 30, 1996, between inTEST CORP and PNC
           Bank, National Association.
10.2       Lease, dated February 11, 1996, between Cherry Hill Industrial Sites, Inc. and inTEST CORP.
10.3       Lease, dated August 5, 1996, between KIP Properties and inTEST CORP.
10.4       Lease, dated December 2, 1977, between Alan Breck Robertson and Mavis Robertson and Robertson
           Engineering (Thame) Limited ("U.K. Lease").
10.5       Assignment of U.K. Lease, dated January 28, 1986, between Citycrown Engineering Limited and
           inTEST LTD.
10.6       Tenancy Agreement, dated April 18, 1996, between Alambon Tools Private Limited and inTEST PTE.
10.7       Agreement of Exchange between Alyn R. Holt and inTEST CORP, dated April 4, 1997. Each of the
           minority stockholders of inTEST LTD, inTEST PTE and inTEST KK have executed Agreements of
           Exchange which are substantially identical to Mr. Holt's except as to certain requirements under the
           laws of each foreign jurisdiction and also as to the parties, the number of shares exchanged and the
           number of inTEST CORP shares received as set forth below:
</TABLE>



<TABLE>
<CAPTION>
                                                              Number of Shares      Number of Shares
                            Party                               Pre-Exchange         Post-Exchange
                           --------------------------------   -------------------   ------------------
<S>       <C>              <C>                                <C>                   <C>
           inTEST LTD:      Alyn R. Holt                               2,775                23,902
                            Brian R. Moore                             6,947                59,836
                            Julian P. Partington                       3,403                29,311

           inTEST PTE:      Alyn R. Holt                              16,500                 7,221
                            Cornelis Hol                              15,000                 6,565

           inTEST KK:       Micronics Japan Company, Ltd.                 60                30,945
                            Tomoyasu Ogura                                54                27,850
                            Cornelis Hol                                   6                 3,094
                            Tomio Wakamatsu                                4                 2,063
                            Kenji Murayama                                 4                 2,063
</TABLE>



<TABLE>
<S>       <C>
10.8       1997 Stock Plan.
10.9*      Form of S Corporation Stockholder Indemnification Agreement.
21.        Subsidiaries of the Company.
23.1       Consent of KPMG Peat Marwick LLP.
23.2*      Consent of Saul, Ewing, Remick & Saul (contained in its opinion to be filed as Exhibit 5 hereto).
23.3       Consent of Ratner & Prestia.
24         Power of Attorney (see signature page).
27.1       Financial Data Schedule for the year ended December 31, 1996.
27.2       Financial Data Schedule for the quarter ended March 31, 1997.
</TABLE>

- ------------
* To be filed by amendment.

     (b) Financial Statement Schedules.

         Schedule II -- Valuation of Qualifying Accounts.

         All other schedules for which provision is made in the applicable 
accounting regulations of the Securities and Exchange Commission are not 
required under the related instructions or are inapplicable, and therefore have 
been omitted.                                 

                                      II-3


<PAGE>



Item 17. Undertakings

     The Registrant hereby undertakes:

     (1) To provide to the Underwriters at the closing specified in the
Underwriting Agreement, certificates in such denominations and registered in
such names as required by the Underwriters to permit prompt delivery to each
purchaser.

     (2) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the applicable provisions of the DGCL, or otherwise, the
Company has been advised that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

     (3) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

     (4) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

                                      II-4


<PAGE>



                                  SIGNATURES

     Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Cherry Hill, and
State of New Jersey on the 2nd day of May, 1997.

                                    inTEST CORPORATION


                                         
                                    By: /s/ Alyn R. Holt
                                       ------------------------------------
                                        Alyn R. Holt
                                        Chairman and Chief Executive Officer




                               POWER OF ATTORNEY

     Each person whose signature appears below hereby constitutes and appoints
Alyn R. Holt and Hugh T. Regan, Jr., and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution, to sign on his
behalf, individually and in each capacity stated below, all amendments and
post-effective amendments to this Registration Statement on Form S-1 and to file
the same, with all exhibits thereto and any other documents in connection
therewith, with the Commission under the Securities Act, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as each might or could do in
person, hereby ratifying and confirming each act that said attorneys-in-fact and
agents may lawfully do or cause to be done by virtue thereof.

     Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities
indicated on May 2, 1997.


<TABLE>
<CAPTION>
             Signature                                        Title
- --------------------------------------   -------------------------------------------------
<S>                                      <C>
          /s/ Alyn R. Holt                Chairman and Chief Executive Officer
- -----------------------------------       (principal executive officer)
             Alyn R. Holt

     /s/ Robert E. Matthiessen
- -----------------------------------       President, Chief Operating Officer and Director
       Robert E. Matthiessen

       /s/ Daniel J. Graham
- -----------------------------------       Senior Vice President and Director
        Daniel J. Graham

       /s/ Hugh T. Regan, Jr.             Chief Financial Officer and Treasurer
- -----------------------------------       (principal financial officer and accounting
        Hugh T. Regan, Jr.                 officer)

       /s/ Hugh T. Regan, Sr.             Secretary
- -----------------------------------
          Hugh T. Regan, Sr.

       /s/ Richard O. Endres              Director
- -----------------------------------
         Richard O. Endres

       /s/ Stuart F. Daniels              Director
- -----------------------------------
         Stuart F. Daniels

</TABLE>


      

                                      II-5


<PAGE>

                      inTEST CORPORATION AND SUBSIDIARIES
                                                                    Schedule II
                       Valuation and Qualifying Accounts
                                (in thousands)


<TABLE>
<CAPTION>
                                                         
                                                            Balance at
For the year ended                                          beginning
   December 31,                                             of period
- --------------------                                      --------------
<S>                   <C>                                 <C>
       1994            Allowance for doubtful accounts          $  31
       1995                                                        53
       1996                                                        42
- -------------------------------------------------------------------------------

       1994            Warranty reserve                         $  --
       1995                                                        --
       1996                                                        --
- -------------------------------------------------------------------------------


<CAPTION>
                                   Additions
                      ------------------------------------
                       Charged to
For the year ended     costs and     Charged to other                      Balance at
   December 31,        expenses      accounts-describe    Deductions      end of period
- -----------------------------------------------------------------------------------------
<S>                       <C>           <C>                   <C>            <C>
       1994               50                                    28            53    
       1995               18                                    29            42    
       1996               50                                     4            88  
- -----------------------------------------------------------------------------------------
       1994               --            --                      --            --
       1995               --            --                      --            --
       1996               25            --                      --            25
- -----------------------------------------------------------------------------------------
</TABLE>
                                                                    
                                                                        

                                      S-1


<PAGE>



                                 Exhibit Index


<TABLE>
<CAPTION>
Exhibit
Number       Title or Description
- ---------    --------------------
<S>         <C>
 1.          Form of Underwriting Agreement.
 3.1         Certificate of Incorporation of inTEST CORP.
 3.2         Bylaws of inTEST CORP.
 10.1        Amended and Restated Loan Agreement, dated June 30, 1996, between inTEST CORP and PNC
             Bank, National Association.
 10.2        Lease, dated February 11, 1996, between Cherry Hill Industrial Sites, Inc. and inTEST CORP.
 10.3        Lease, dated August 5, 1996, between KIP Properties and inTEST CORP.
 10.4        Lease, dated December 2, 1977, between Alan Breck Robertson and Mavis Robertson and
             Robertson Engineering (Thame) Limited ("U.K. Lease").
 10.5        Assignment of U.K. Lease, dated January 28, 1986, between Citycrown Engineering Limited and
             inTEST LTD.
 10.6        Tenancy Agreement, dated April 18, 1996, between Alambon Tools Private Limited and inTEST
             PTE.
 10.7        Agreement of Exchange between Alyn R. Holt and inTEST CORP, dated April 4, 1997. Each of
             the minority stockholders of inTEST LTD, inTEST PTE and inTEST KK have executed Agree-
             ments of Exchange which are substantially identical to Mr. Holt's except as to certain
             requirements under the laws of each foreign jurisdiction and also as to the parties, the 
             number of shares exchanged and the number of inTEST CORP shares received as set forth below:
</TABLE>




<TABLE>
<CAPTION>
                                                    Number of Shares      Number of Shares
                             Party                    Pre-Exchange         Post-Exchange
                             -----                -------------------    ------------------
<S>              <C>                                <C>                   <C>
 inTEST LTD:      Alyn R. Holt                               2,775                23,902
                  Brian R. Moore                             6,947                59,836
                  Julian P. Partington                       3,403                29,311

 inTEST PTE:      Alyn R. Holt                              16,500                 7,221
                  Cornelis Hol                              15,000                 6,565

 inTEST KK:       Micronics Japan Company, Ltd.                 60                30,945
                  Tomoyasu Ogura                                54                27,850
                  Cornelis Hol                                   6                 3,094
                  Tomio Wakamatsu                                4                 2,063
                  Kenji Murayama                                 4                 2,063
</TABLE>



 10.8      1997 Stock Plan.
 21.       Subsidiaries of the Company.
 23.1      Consent of KPMG Peat Marwick LLP.
 23.3      Consent of Ratner & Prestia.
 24.       Power of Attorney (see signature page).
 27.1      Financial Data Schedule for the year ended December 31, 1996.
 27.2      Financial Data Schedule for the quarter ended March 31, 1997.







<PAGE>

                                2,616,250 Shares


                               INTEST CORPORATION
                                  Common Stock




                             UNDERWRITING AGREEMENT



                                                      Philadelphia, Pennsylvania
                                                                    May __, 1997


JANNEY MONTGOMERY SCOTT INC.
NEEDHAM & COMPANY, INC.
As Representatives of the Several
 Underwriters Named in Schedule I
 Hereto
c/o Janney Montgomery Scott Inc.
1801 Market Street
Philadelphia, Pennsylvania  19103

Dear Ladies and Gentlemen:

                  inTEST Corporation, a Delaware corporation (the "Company"),
proposes to sell to Janney Montgomery Scott Inc. and Needham & Company, Inc.
(the "Representatives") and the several other underwriters named in Schedule I
hereto (collectively with the Representatives, the "Underwriters") 1,820,000
shares of the Company's common stock ("Common Shares"), and the selling
stockholders of the Company named in Schedule II hereto (collectively, the
"Selling Stockholders") propose to sell severally to the Underwriters an
aggregate of 455,000 Common Shares. The Common Shares to be sold to the
Underwriters by the Company and the Selling Stockholders are hereinafter
referred to as the "Firm Shares." The respective amounts of the Firm Shares to
be so purchased by the several Underwriters are set forth opposite their names
in Schedule I hereto. The Firm Shares shall be offered to the
 public at an
initial public offering price of $        per Firm Share (the "Offering Price").

                  In addition, in order to cover over-allotments in the sale of
the Firm Shares, the Underwriters may purchase for the Underwriters' own
accounts, ratably in proportion to the amounts set forth opposite their
respective names in Schedule I hereto, up to 341,250

                                        1


<PAGE>

additional Common Shares from the Selling Stockholders named in Schedule II
hereto (such additional Common Shares are referred to herein as the "Optional
Shares"). If any Optional Shares are purchased, the Optional Shares shall be
purchased for offering to the public at the Offering Price and in accordance
with the terms and conditions set forth herein. The Firm Shares and the Optional
Shares are referred to collectively herein as the "Shares."

                  The Company and the Selling Stockholders, intending to be
legally bound, hereby confirm their agreement with the Underwriters as follows:

                  1. Representations and Warranties.

                           (a) Representations and Warranties of the Company.
The Company, and each of the subsidiaries of the Company listed in Exhibit A
hereto (each a "Subsidiary", all of the foreign subsidiaries collectively
referred to as the "Foreign Subsidiaries", all of the domestic subsidiaries
referred to as the "Domestic Subsidiaries" and all of the Foreign Subsidiaries
and Domestic Subsidiaries collectively referred to as the "Subsidiaries")
jointly and severally represent and warrant to, and agree with, the several
Underwriters that:

                                    (i) The Company has prepared, in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations (the "Regulations"), of the Securities and Exchange
Commission (the "SEC") under the Act in effect until applicable times, and has
filed with the SEC a registration statement on Form S-1 (File No. 333-_____) and
one or more amendments thereto for the primary purpose of registering the Shares
under the Act. Copies of such registration statement and any amendments thereto,
and all forms of the related prospectus contained therein, have been delivered
to the Representatives; any preliminary prospectus included in such registration
statement or filed with the SEC pursuant to Rule 424(a) of the Regulations is
hereinafter called a "Preliminary Prospectus." The various parts of such
registration statement, including all exhibits thereto and the information (if
any) contained in the form of final prospectus filed with the SEC pursuant to
Rule 424(b) of the Regulations in accordance with Section 5(a) of this Agreement
and deemed by virtue of Rule 424 of the Regulations to be part of the
registration statement at the time it was declared effective, each as amended at
the time the registration statement became effective, are hereinafter
collectively called the "Registration Statement." The final prospectus in the
form included in the Registration Statement or first filed with the SEC pursuant
to Rule 424(b) of the Regulations and any amendments or supplements thereto are
hereinafter called the "Prospectus."

                                    (ii) The Registration Statement has become
effective under the Act and the SEC has not issued any stop order suspending the
effectiveness of the Registration Statement or preventing or suspending the use
of the Preliminary Prospectus, nor has the SEC instituted or threatened to
institute proceedings with respect to such an order. No stop order suspending
the sale of the Shares in any jurisdiction designated by the Representatives as
provided for in Section 5(f) hereof has been issued, and no proceedings for that
purpose have been instituted or threatened. The Company has complied in all
material

                                        2


<PAGE>



respects with all requests of the SEC, or requests of which the Company has been
advised of any state securities commission in a state designated by the
Representatives as provided for in Section 5(f) hereof, for additional
information to be included in the Registration Statement, any Preliminary
Prospectus or the Prospectus unless such request has been waived. Each
Preliminary Prospectus conformed to all the requirements of the Act and the
Regulations as of its date in all material respects and did not as of its date
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
the foregoing shall not apply to statements in or omissions from any Preliminary
Prospectus in reliance upon and in conformity with information supplied to the
Company in writing by or on behalf of any Underwriter through the
Representatives expressly for use therein. The Registration Statement, on the
date on which it is declared effective by the SEC (the "Effective Date") and
when any post-effective amendment thereof shall become effective, and the
Prospectus, at the time it is filed with the SEC pursuant to Rule 424(b) and on
the Closing Date (as defined in Section 3 hereof) and any Option Closing Date
(as defined in Section 4(b) hereof), will conform in all material respects to
all the requirements of the Act and the Regulations, and will not, on any of
such dates, include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, except that this representation and warranty does not
apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information furnished to
the Company in writing by or on behalf of any Underwriter through the
Representatives expressly for use therein.

                                    (iii) The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with all necessary corporate power and authority, and all required
licenses, permits, clearances, certifications, registrations, approvals,
consents and franchises, to own or lease and operate its properties and to
conduct its business as described in the Prospectus, and to execute, deliver and
perform this Agreement. Each of the Subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with all necessary corporate power and
authority, and all required licenses, permits, clearances, certifications,
registrations, approvals, consents and franchises, to own or lease and operate
its properties and to conduct its business as described in the Prospectus.

                                    (iv) The outstanding shares of capital stock
or other evidence of ownership of the Subsidiaries have been duly authorized and
validly issued and are owned by the Company (A) 100% with respect to the
Domestic Subsidiaries, (B) 79% with respect to the Foreign Subsidiaries and (C)
upon the consummation of the transactions contemplated in the Exchange
Agreements (the "Exchange") each dated               , 1997 (each an "Exchange
Agreement" and collectively, the "Exchange Agreements") by and between the
Company and each of those persons named in Schedule III hereto (collectively,
the "Subsidiary Stockholders"), 100% with respect to the Foreign Subsidiaries,
in all cases free and clear of all liens, encumbrances and security interests.
There are no options, obligations

                                        3


<PAGE>

to issue or other rights to convert or exchange any obligations into shares of
capital stock or ownership interests in the Subsidiaries are outstanding. Except
as provided in the corporation law of the respective jurisdictions of
incorporation of the Subsidiaries or as set forth in the Prospectus, there are
no restrictions of any kind which prevent the payment of dividends by any of the
Subsidiaries.

                                    (v) This Agreement has been duly authorized,
executed and delivered by the Company and each of the Subsidiaries and
constitutes, with respect to each, its legal, valid and binding obligation,
enforceable against the Company and each of the Subsidiaries in accordance with
its terms, except as such enforceability may be limited by equitable principles
or by the application of bankruptcy, insolvency or other similar laws relating
to or affecting creditors' rights generally, and except as rights to indemnity
and contribution hereunder may be limited by applicable securities laws.

                                    (vi) The Exchange Agreements have been duly
authorized, executed and delivered by the Company and constitute the Company's
legal, valid and binding obligation, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
equitable principles or by the application of bankruptcy, insolvency or other
similar laws relating to or affecting creditors' rights generally.

                                    (vii) The execution, delivery and
performance of this Agreement by the Company and the Subsidiaries does not and
will not, with or without the giving of notice or the lapse of time, or both,
(a) conflict with any term or provision of the Company's and each of the
Subsidiaries' Articles of Incorporation or Bylaws, or similar governing
instruments, (b) result in a breach of, constitute a default under, result in
the termination or modification of, result in the creation or imposition of any
lien, security interest, charge or encumbrance upon any of the assets of the
Company or any of the Subsidiaries, or require any payment by the Company or any
of the Subsidiaries, or impose any liability on the Company or any of the
Subsidiaries pursuant to, any contract, indenture, mortgage, deed of trust,
commitment or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of the Company's or any of the
Subsidiaries' assets are bound or affected, (c) assuming compliance with Blue
Sky laws and regulations applicable to the offer and sale of the Shares, violate
any law, rule, regulation, judgment, order or decree of any government or
governmental agency, instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its Subsidiaries or any of the Company's
or any of its Subsidiaries' properties or business or (d) result in a breach,
termination or lapse of the Company's or any of its Subsidiaries' corporate
power and authority to own or lease and operate its assets and properties and
conduct its business as described in the Prospectus.

                                    (viii) At the date or dates indicated in the
Prospectus, the Company had the duly authorized and outstanding capital stock
set forth in the Prospectus; and on the Effective Date, the Closing Date and any
Option Closing Date, there were and will be no options or warrants for the
purchase of, other outstanding rights to purchase,

                                        4


<PAGE>



agreements or obligations to issue or agreements or other rights to convert or
exchange any obligation or security into, capital stock of the Company or
securities convertible into or exchangeable for capital stock of the Company,
except as described in the Prospectus.

                                    (ix) The authorized capital stock of the
Company conforms in all respects with the description thereof in the Prospectus.

                                    (x) The currently outstanding shares of the
Company's and the Subsidiaries' capital stock, including the Shares to be
purchased by the Underwriters from the Selling Stockholders, have been duly
authorized and are validly issued, fully paid and non-assessable, and none of
such outstanding shares of the Company's or Subsidiaries' capital stock has been
issued in violation of any preemptive rights of any security holder of the
Company or the Subsidiaries. The Common Shares to be issued to the Selling
Stockholders upon the consummation of the Exchange will, upon issuance, be duly
authorized, validly issued, fully paid and non-assessable, and none of such
outstanding shares of the Company's capital stock will be issued in violation of
any preemptive rights of any security holder of the Company. The holders of the
outstanding shares of the Company's and the Subsidiaries' capital stock are not
subject to personal liability solely by reason of being such holders. The offers
and sales of the outstanding shares of the Company's and the Subsidiaries'
capital stock, whether described in the Registration Statement or otherwise,
were and, as to the Common Shares to be issued on consummation of the Exchange,
will be made in conformity with applicable federal, state and foreign securities
laws.

                                    (xi) When the Shares have been duly
delivered against payment therefor as contemplated by this Agreement, the Shares
will be validly issued, fully paid and non-assessable, and the holders thereof
will not be subject to personal liability solely by reason of being such
holders. The certificates representing the Shares are in proper legal form
under, and conform in all respects to the requirements of, the Delaware General
Corporation Law, as amended. Neither the filing of the Registration Statement
nor the offering or sale of Shares as contemplated by this Agreement gives any
security holder of the Company any rights for or relating to the registration of
any Common Shares or any other capital stock of the Company, except such as have
been satisfied or waived.

                                    (xii) No consent, approval, authorization,
order, registration, license or permit of, or filing or registration with, any
court, government, governmental agency, instrumentality or other regulatory body
or official is required for the valid and legal execution, delivery and
performance by the Company and the Subsidiaries of this Agreement and the
consummation of the transactions contemplated hereby and described in the
Prospectus, except such as may be required for the registration of the Shares
under the Act and the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and for compliance with the applicable state securities or Blue Sky laws.


                                        5


<PAGE>

                                    (xiii) The Common Shares (including the
Shares) have been approved for inclusion, subject only to official notice of
issuance, in the Nasdaq National Market.

                                    (xiv) The statements in the Registration
Statement and Prospectus, insofar as they are descriptions of or references to
contracts, agreements or other documents, are accurate in all material respects
and present or summarize fairly, in all material respects, the information
required to be disclosed under the Act and/or the Regulations, and there are no
contracts, agreements or other documents required to be described or referred to
in the Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement under the Act or the Regulations that have not been so
described, referred to or filed, as required.

                                    (xv) The consolidated financial statements
of the Company (including the notes thereto) filed as part of any Preliminary
Prospectus, the Prospectus and the Registration Statement present fairly, in all
material respects, the financial position of the Company and the Subsidiaries as
of the respective dates thereof, and the results of operations, stockholders'
equity and cash flows of the Company and the Subsidiaries for the periods
indicated therein, all in conformity with generally accepted accounting
principles consistently applied. The supporting notes and schedules included in
the Registration Statement fairly state in all material respects the information
required to be stated therein in relation to the financial statements taken as a
whole. The financial information included in the Prospectus under the caption
"Prospectus Summary" and "Selected Consolidated Financial Data" presents fairly
the information shown therein and has been compiled on a basis consistent with
that of the audited financial statements included in the Registration Statement.
The unaudited pro forma financial information included in the Registration
Statement complies as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X under the Act and the
pro forma adjustments have been properly applied to the historical amounts in
the compilation of this information.

                                    (xvi) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, there has not been (a) any material adverse change
(including, whether or not insured against, any material loss or damage to any
material assets), or development involving a prospective material adverse
change, in the general affairs, properties, assets, management, condition
(financial or otherwise), results of operations, stockholders' equity, business
or prospects of either the Company or the Subsidiaries taken as a whole, (b) any
material adverse change, loss, reduction, termination or non-renewal of any
contract to which the Company or any Subsidiary is a party, (c) any transaction
entered into by the Company or any Subsidiary not in the ordinary course of its
business that is material to the Company and the Subsidiaries taken as a whole,
(d) any dividend or distribution of any kind declared, paid or made by the
Company or any Subsidiary on its capital stock, (e) any liabilities or
obligations, direct or indirect, incurred by the Company or any Subsidiary that
are material to the Company and the Subsidiaries taken as a whole, (f) any
change in the capitalization or stock ownership of the

                                        6


<PAGE>



Company or any Subsidiary or (g) any change in the indebtedness of the Company
or any Subsidiary that is material to the Company and the Subsidiaries taken as
a whole. Neither the Company nor any Subsidiary has any contingent liabilities
or obligations that are material to the Company and the Subsidiaries taken as a
whole and that are not disclosed in the Prospectus.

                                    (xvii) The Company has not distributed and
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, a Preliminary
Prospectus, the Prospectus and other material, if any, permitted by the Act and
the Regulations. Neither the Company nor any of its officers, directors or
affiliates has taken nor shall the Company take any action designed to, or that
might be reasonably expected to cause or result in, stabilization or
manipulation of the price of the Shares.

                                    (xviii) The Company and each Subsidiary have
filed with the appropriate federal, state and local governmental agencies, and
all foreign countries and political subdivisions thereof, all tax returns that
are required to be filed or have duly obtained extensions of time for the filing
thereof and have paid all taxes shown on such returns or otherwise due and all
material assessments received by it to the extent that the same have become due.
Neither the Company nor any Subsidiary has executed or filed with any taxing
authority, foreign or domestic, any agreement extending the period for
assessment or collection of any income or other tax or is a party to any pending
action or proceeding by any foreign or domestic governmental agencies for the
assessment or collection of taxes, and no claims for assessment or collection of
taxes have been asserted against the Company or any Subsidiary that might
materially adversely affect the general affairs, assets, properties, condition
(financial or otherwise), results of operations, stockholders' equity, business
or prospects of the Company and the Subsidiaries, taken as a whole.

                                    (xix) To the knowledge of the Company, KPMG
Peat Marwick LLP, which has given its reports on certain financial statements
included as part of the Registration Statement, is a firm of independent
certified public accountants as required by the Act and the Regulations.

                                    (xx) Neither the Company nor any Subsidiary
is in violation of or in default under any of the terms or provisions of (a) its
Articles or Certificate of Incorporation or Bylaws or similar governing
instruments, or (b) any indenture, mortgage, deed of trust, contract, commitment
or other agreement or instrument to which it is a party or by which it or any of
its properties is bound or affected, (c) any law, rule, regulation, judgment,
order or decree of any government or governmental agency, instrumentality or
court, domestic or foreign, having jurisdiction over it or any of its properties
or business or (d) any license, permit, certification, registration, approval,
consent or franchise referred to in Section 1(a)(iii) hereof.


                                        7


<PAGE>

                                    (xxi) There are no claims, actions, suits,
protests, proceedings, arbitrations, investigations or inquiries pending before,
or threatened or contemplated by, any governmental agency, instrumentality,
court or tribunal, domestic or foreign, or before any private arbitration
tribunal, including, without limitation, the current reexamination by the U.S.
Patent and Trademark Office of the Company's U.S. Patent 4,589,815 issued on May
20, 1986, to which the Company or any Subsidiary is a party, that could
reasonably be expected to affect the validity of any of the outstanding Common
Shares, or that, if determined adversely to the Company or any Subsidiary,
would, in any case or in the aggregate, result in any material adverse change in
the general affairs, properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or prospects of the Company or any of
the Subsidiaries taken as a whole; nor, to the Company's knowledge, is there any
reasonable basis for any such claim, action, suit, protest, proceeding,
arbitration, investigation or inquiry. There are no outstanding orders,
judgments or decrees of any court, governmental agency, instrumentality or other
tribunal, enjoining the Company or any Subsidiary from, or requiring the Company
or any Subsidiary to take or refrain from taking, any action, or to which the
Company or any Subsidiary, their properties, assets or business are bound or
subject.

                                    (xxii) The Company and the Subsidiaries own,
or possess adequate rights to use, all patents, patent applications, trademarks,
trade names, service marks, licenses, inventions, copyrights, know-how, trade
secrets, confidential information, processes and formulations and other
proprietary information necessary for, used in or proposed to be used in the
conduct of their business as described in the Prospectus (collectively, the
"Intellectual Property"). The Company and the Subsidiaries have not infringed
upon, are not infringing upon and have not received any notice of conflict with,
the asserted intellectual property or other rights of others and the Company
knows of no reasonable basis for any notice or claim of such infringement or
conflict.

                                    (xxiii) The Company and each Subsidiary have
good and marketable title to all property described in the Prospectus as being
owned by them, free and clear of all liens, security interests, charges or
encumbrances, except such as are described or referred to in the Prospectus or
such as do not materially affect the value of such property and do not interfere
in any material respect with the use made, or proposed to be made, of such
property by the Company or the Subsidiary. The Company and each Subsidiary have
adequately insured their property against loss or damage by fire or other
casualty and maintain, in amounts reasonably believed by them to be adequate,
insurance against such other risks as they deem appropriate. All real and
personal property leased by the Company or any Subsidiary, as described or
referred to in the Prospectus, is held by the Company or such Subsidiary under
valid leases. All of the facilities of the Company and each Subsidiary (the
"Premises"), and all operations conducted thereon, are now and, since the
Company or any Subsidiary began to use such Premises, always have been and, to
the knowledge of the Company, prior to when the Company or any Subsidiary began
to use such Premises, always had been, in compliance with all, foreign or
domestic, federal, state and local statutes or ordinances, regulations and rules
concerning or relating to industrial hygiene and the protection of health and
the environment (collectively, "the Governmental Laws"), except to

                                        8


<PAGE>

the extent that any failure to be in such compliance would not materially
adversely affect the general affairs, properties, condition (financial or
otherwise), results of operations, stockholders' equity, business or prospects
of the Company and the Subsidiaries taken as a whole. There are no conditions
on, about, beneath or arising from the Premises that might give rise to
liability, the imposition of a statutory lien or require a "Response," "Removal"
or "Remedial Action," as defined herein, under any of the Governmental Laws, and
that would materially adversely affect the general affairs, properties,
condition (financial or otherwise), results of operations, stockholders' equity,
business or prospects of the Company and the Subsidiaries taken as a whole.
Neither the Company nor any Subsidiary has received notice, and the Company does
not have knowledge, of any claim, demand, investigation, regulatory action, suit
or other action instituted or threatened against the Company or any Subsidiary
or any portion of the Premises relating to any of the Governmental Laws. Neither
the Company nor any Subsidiary has received any notice of material violation,
citation, complaint, order, directive, request for information or response
thereto, notice letter, demand letter or compliance schedule to or from any
governmental or regulatory agency, foreign or domestic, arising out of or in
connection with "hazardous substances" (as defined by applicable Governmental
Laws) on, about, beneath, arising from or generated at the Premises. As used in
this subsection, the terms "Response," "Removal" and "Remedial Action" shall
have the respective meanings assigned to such terms under Sections
101(23)-101(25) of the Comprehensive Environmental Response, Compensation and
Liability Act, as amended by the Superfund Amendments and Reauthorization Act,
42 U.S.C. 9601(23)-9601(25).

                                    (xxiv) The Company and each Subsidiary
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that: (a) transactions are executed in accordance with
management's general or specific authorization; (b) transactions are recorded as
necessary in order to permit preparation of financial statements in accordance
with generally accepted accounting principles and statutory accounting practices
and to maintain accountability for assets; (c) access to assets is permitted
only in accordance with management's general or specific authorization and (d)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

                                    (xxv) Each contract or other instrument
(however characterized or described) to which the Company or any Subsidiary is a
party or by which any of their properties or business is bound or affected and
which is material to the conduct of the Company's business as described in the
Prospectus has been duly and validly executed by the Company or such Subsidiary,
and, to the knowledge of the Company, by the other parties thereto. Each such
contract or other instrument is in full force and effect and is enforceable
against the parties thereto in accordance with its terms, and the Company and
the Subsidiaries are not, and to the knowledge of the Company, no other party
is, in default thereunder, and no event has occurred that, with the lapse of
time or the giving of notice, or both, would constitute a default under any such
contract or other instrument. All necessary consents under such contracts or
other instruments to disclosure in the Prospectus with respect thereto have been
obtained.

                                        9


<PAGE>

                                    (xxvi) Except for such plans that are
expressly disclosed in the Prospectus, the Company and the Subsidiaries do not
have any employee benefit plan, profit sharing plan, employee pension benefit
plan or employee welfare benefit plan or deferred compensation arrangements
("Plans") that are subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended, or the rules and regulations thereunder
("ERISA"). All Plans that are subject to ERISA are in compliance with ERISA, in
all material respects, and, to the extent required by the Internal Revenue Code
of 1986, as amended (the "Code"), in compliance with the Code in all material
respects. Neither the Company nor any Subsidiary has or ever had any employee
pension benefit plan that is subject to Part 3 of Subtitle B of Title I of ERISA
or any defined benefit plan or multi-employer plan. The Company has not
maintained retired life and retired health insurance plans that are employee
welfare benefit plans providing for continuing benefit or coverage for any
employee or any beneficiary of any employee after such employee's termination of
employment, except as required by Section 4980B of the Code. No fiduciary or
other party in interest with respect to any of the Plans has caused any of such
Plans to engage in a prohibited transaction as defined in Section 406 of ERISA.
As used in this subsection, the terms "defined benefit plan," "employee benefit
plan," "employee pension benefit plan," "employee welfare benefit plan,"
"fiduciary" and "multi-employer plan" shall have the respective meanings
assigned to such terms in Section 3 of ERISA.

                                    (xxvii) No labor dispute exists with the
employees of the Company or any Subsidiary, and no such labor dispute is
threatened. The Company has no knowledge of any existing or threatened labor
disturbance by the employees of any of the principal suppliers, contractors or
customers of the Company or its Subsidiaries that would materially adversely
affect the general affairs, properties, condition (financial or otherwise),
results of operations, stockholders' equity, business or prospects of the
Company and the Subsidiaries taken as a whole.

                                    (xxviii) Neither the Company nor any
Subsidiary has incurred any liability for any finder's fees or similar payments
in connection with the transactions contemplated herein.

                                    (xxix) Each of the Company and the
Subsidiaries currently intends to conduct its affairs in such a manner as to
ensure that it will not be an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and
regulations thereunder.

                                    (xxx) There is no document or contract of a
character required to be described in the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required; no statement, representation, warranty or covenant made by the Company
or any Subsidiary in this Agreement or in any certificate or document required
by this Agreement to be delivered to the Representatives is, was when made, or
as of the Closing Date or any Option Closing Date will be, inaccurate, untrue or
incorrect in any material respect. No transaction has occurred or is proposed
between or among the Company

                                       10


<PAGE>

and any of its officers, directors or stockholders or any affiliate of any such
officer, director or stockholder that is required to be described in and is not
described in the Registration Statement and the Prospectus.

                                    (xxxi) None of the Company, any Subsidiary
or any officer, director, employee, agent or other person acting on behalf of
the Company or such Subsidiary has, directly or indirectly, given or agreed to
give any money, property or similar benefit or consideration to any customer or
supplier (including any employee or agent of any customer or supplier) or
official or employee of any agency or instrumentality of any government (foreign
or domestic) or political party or candidate for office (foreign or domestic) or
any other person who was, is or in the future may be in a position to affect the
general affairs, properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or prospects of the Company and the
Subsidiaries taken as a whole or any actual or proposed business transaction of
the Company or the Subsidiaries that (a) could subject the Company or such
Subsidiary to any liability (including, but not limited to, the payment of
monetary damages) or penalty in any civil, criminal or governmental action or
proceeding, foreign or domestic, which would have a material adverse effect on
the general affairs, properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or prospects of the Company or the
Subsidiaries taken as a whole or (b) violates any law, rule or regulation,
foreign or domestic, to which the Company or the Subsidiaries are subject, which
violation if proven would have a material adverse effect on the general affairs,
properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company and the Subsidiaries
taken as a whole.

                                    (xxxii) The Company has not declared, paid
or accrued any dividends or distributions to stockholders since its inception
except as described in the Prospectus and will not hereafter declare, pay or
accrue any such dividends or distributions prior to the Closing Date.

                                    (xxxiii) Except as described on Schedule IV
attached hereto, none of the stockholders of the Company, including those who
will become such upon consummation of the Exchange, is affiliated with any
member of the National Association of Securities Dealers, Inc. (the "NASD").

                  Any certificate signed by any officer of the Company or any
Subsidiary in such capacity and delivered to the Representatives or to counsel
for the Underwriters pursuant to this Agreement shall be deemed a representation
and warranty by the Company or such Subsidiary to the several Underwriters as to
the matters covered thereby.

                           (b) Representations and Warranties of the Selling
Stockholders. Each of the Selling Stockholders represents and warrants to, and
agrees with, the several Underwriters that:


                                       11


<PAGE>

                                    (i) The Exchange Agreements have been duly
authorized, executed and delivered by the Subsidiary Stockholders, except for
the Company (the "Minority Subsidiary Stockholders"), and constitute the
Minority Subsidiary Stockholders' legal, valid and binding obligation,
enforceable against the Minority Subsidiary Stockholders in accordance with
their terms, except as such enforceability may be limited by equitable
principles or by the application of bankruptcy, insolvency or other similar laws
relating to or affecting creditors' rights generally, and except as rights to
indemnity and contribution hereunder may be limited by applicable securities
laws.

                                    (ii) Such Selling Stockholder has duly
executed and delivered a power of attorney in the form contained in the Custody
Agreement (as defined below) appointing each of Alyn R. Holt and Hugh T. Regan,
Jr. as such Selling Stockholder's attorney-in-fact (the "Attorney-in-Fact"). The
Attorney-in-Fact is authorized to execute, deliver and perform this Agreement on
behalf of such Selling Stockholder, including, without limitation, the authority
to determine the purchase price to be paid to each such Selling Stockholder by
the Underwriters as set forth in Section 2 of this Agreement, and in connection
therewith such Selling Stockholder has duly executed and delivered a Power of
Attorney and Custody Agreement (the "Custody Agreement"), in the form heretofore
delivered to the Representatives, with          as custodian (the "Custodian").
Certificates in negotiable form representing the Shares to be sold by such
Selling Stockholder hereunder have been deposited with the Custodian, except for
those Shares to be issued in the Exchange in which case the certificates
representing the shares of the Foreign Subsidiaries to be exchanged have been
deposited, pursuant to the Custody Agreement for the purpose of delivery
pursuant to this Agreement. Those Shares to be issued in the Exchange shall be
issued by the Company's transfer agent upon the consummation thereof and
delivered pursuant to this Agreement. Such Selling Stockholder agrees that the
Shares represented by the certificates which are on deposit or which will be
issued by the Company's transfer agent upon the consummation of the Exchange are
subject to the interests of the Underwriters hereunder, that the arrangements
made for such custody and the appointment of the Attorney-in-Fact are to that
extent irrevocable, and that the obligations of such Selling Stockholder
hereunder shall not be terminated, except as expressly provided in this
Agreement or the Custody Agreement, by any act of such Selling Stockholder, by
operation of law or otherwise, by the death or incapacity of such Selling
Stockholder, or by the occurrence of any other event. If any individual Selling
Stockholder should die or become incapacitated, or if any other event should
occur, before the delivery of the Shares to be sold by such Selling Stockholder
hereunder, the certificates for such Shares shall be delivered by the Custodian
and issued by the Company's transfer agent in accordance with the terms and
conditions of this Agreement and Custody Agreement as if such death, incapacity,
or other event had not occurred, regardless of whether or not the Custodian or
Attorney-in-Fact shall have received notice thereof.

                                    (iii) Such Selling Stockholder has the full
right, power and authority to enter into this Agreement, the Custody Agreement
and the Exchange Agreements, and has or, in the case of Shares to be issued
pursuant to the Exchange Agreements, will have

                                       12


<PAGE>

the full right, power and authority to sell, transfer and deliver the Shares to
be sold by such Selling Stockholder hereunder, and this Agreement, the Custody
Agreement and the Exchange Agreements have been duly authorized, executed and
delivered by such Selling Stockholder and constitute the legal, valid and
binding obligations of such Selling Stockholder enforceable in accordance with
their respective terms. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and by the Custody
Agreement and the Exchange Agreements will not result in a violation or breach
by such Selling Stockholder of, or constitute a default by such Selling
Stockholder under, any indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound, any
organizational document relating to such Selling Stockholder (including, without
limitation, any partnership agreement, articles of incorporation, bylaws or
other governing instruments), or any statute, judgment, decree, order, rule or
regulation of any court or governmental agency or body, foreign or domestic,
applicable to such Selling Stockholder.

                                    (iv) All authorizations, approvals and
consents necessary for the execution and delivery by such Selling Stockholder of
the Custody Agreement and such Selling Stockholder's Exchange Agreement, if any,
the execution and delivery by or on behalf of such Selling Stockholder of this
Agreement, the consummation of the Exchange and the sale and delivery of the
Shares to be sold by such Selling Stockholder hereunder (other than such
authorizations, approvals or consents as may be necessary under the state
securities or Blue Sky laws), have been obtained and are in full force and
effect.

                                    (v) Such Selling Stockholder now is (except
for the Shares to be issued upon the Exchange), and on the Closing Date will be,
the lawful owner of the Shares to be sold by such Selling Stockholder pursuant
to this Agreement. On the Closing Date, such Selling Stockholder will have valid
and marketable title to such Shares, free and clear of all liens, encumbrances,
security interests or other restrictions (other than those created under the
Custody Agreement). Upon proper delivery of and payment for such Shares as
provided herein, the Underwriters will acquire valid and marketable title
thereto, free and clear of all liens, encumbrances, security interests and other
restrictions.

                                    (vi) To the knowledge of such Selling
Stockholder after due inquiry, the representations and warranties of the Company
contained in Section 1(a) hereof are true and correct. Such Selling Stockholder
has examined the Registration Statement and the Prospectus and has no knowledge
of any fact, condition or information not disclosed therein which has adversely
affected or could adversely affect the general affairs, assets, properties,
condition (financial or otherwise), results of operations, stockholders' equity,
business or prospects of the Company and the Subsidiaries, taken as a whole. To
the knowledge of such Selling Stockholder after due inquiry and review of the
Registration Statement and Prospectus, neither the Registration Statement nor
the Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Such Selling Stockholder is not prompted to sell the

                                       13


<PAGE>



Shares to be sold by such Selling Stockholder hereunder by any information
concerning the Company or any Subsidiary which is not set forth in the
Prospectus.

                                    (vii) Such Selling Stockholder has examined
the Registration Statement and the Prospectus and the information relating to
such Selling Stockholder set forth therein and, as to such information, neither
the Registration Statement nor the Prospectus contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

                                    (viii) Such Selling Stockholder will comply
in all respects with the lock-up agreement set forth in Section 3(m) of the
Custody Agreement.

                                    (ix) Such Selling Stockholder has not
incurred any liability for any finder's fee or similar payments in connection
with the sale of such Selling Stockholder's Shares hereunder.

                                    (x) Such Selling Stockholder (A) has not
distributed and will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, a
Preliminary Prospectus, the Prospectus and other material, if any, permitted by
the Act and the Regulations, and (B) has not taken and will not take any action
designed to, or that might be reasonably expected to cause or result in,
stabilization or manipulation of the price of the Shares.

                  2. Purchase and Sale of Firm Shares. On the basis of the
representations, warranties, covenants and agreements contained herein, but
subject to the terms and conditions set forth herein, (a) the Company shall sell
to the several Underwriters at the Offering Price, less the Underwriting
Discounts and Commissions in the amount of $_______ per Share, the respective
amounts of the Firm Shares set forth opposite their names on Schedule I hereto,
and the Underwriters, severally and not jointly, shall purchase from the Company
on a firm commitment basis, at the Offering Price, less the Underwriting
Discounts and Commissions in the amount of $______ per Share, the respective
amounts of the Firm Shares set forth opposite their names on Schedule I hereto;
and (b) the Selling Stockholders shall sell to the several Underwriters at the
Offering Price, less the Underwriting Discounts and Commissions in the amount of
$_______ per Share, the respective amounts of the Firm Shares set forth opposite
their names on Schedule II hereto, and the Underwriters, severally and not
jointly, shall purchase from the Selling Stockholders on a firm commitment
basis, at the Offering Price, less the Underwriting Discounts and Commissions in
the amount of $_______ per Share, the respective amounts of the Firm Shares set
forth opposite their names on Schedule I hereto. In making this Agreement, each
Underwriter is contracting severally, and not jointly, and except as provided in
Sections 4 and 11 hereof, the agreement of each Underwriter is to purchase only
that number of shares specified with respect to that Underwriter in Schedule I
hereto. The Underwriters shall offer the Shares to the public as set forth in
the Prospectus.

                                       14


<PAGE>


                  3. Payment and Delivery. Payment for the Firm Shares shall be
made by certified or official bank check payable to the order of (i) the Company
with respect to the Firm Shares sold by it and (ii) the Custodian with respect
to the Firm Shares sold by the Selling Stockholders, in New York Clearing House
funds at the offices of Janney Montgomery Scott Inc., 1801 Market Street,
Philadelphia, Pennsylvania, or such other place as shall be agreed upon by the
Company, the Attorney-in-Fact and the Representatives, or in immediately
available funds wired to such accounts as the Company or the Custodian may
specify (with all costs and expenses incurred by the Underwriters in connection
with such settlement in immediately available funds, including, but not limited
to, interest or cost of funds and expenses, to be borne by the Company), against
delivery of the Firm Shares to the Representatives at the offices of Janney
Montgomery Scott Inc., 1801 Market Street, Philadelphia, Pennsylvania, or such
other place as shall be agreed upon by the Company, the Attorney-in-Fact and the
Representatives, for the respective accounts of the Underwriters. Such payment
and delivery will be made at 10:00 AM., Philadelphia, Pennsylvania time, on
_________, 1997. Such time and date are referred to herein as the "Closing
Date." The certificates representing the Firm Shares to be sold and delivered
will be in such denominations and registered in such names as the
Representatives request not less than two full business days prior to the
Closing Date, and will be made available to the Representatives for inspection,
checking and packaging at the New York correspondent office of the Company's
transfer agent not less than one full business day prior to the Closing Date.

                  4. Option to Purchase Optional Shares.

                           (a) For the purposes of covering any over-allotments
in connection with the distribution and sale of the Firm Shares as contemplated
by the Prospectus, subject to the terms and conditions herein set forth, the
several Underwriters are hereby granted an option by the Selling Stockholders to
purchase all or any part of the Optional Shares, pro rata as among the Optional
Shares from each Selling Stockholder (the "Over-allotment Option"). The purchase
price to be paid for the Optional Shares shall be the Offering Price less the
Underwriting Discounts and Commissions shown on the cover page of the
Prospectus. The Over-allotment Option granted hereby may be exercised by the
Representatives on behalf of the several Underwriters as to all or any part of
the Optional Shares at any time and from time to time within 30 days after the
date of the Prospectus. No Underwriter shall be under any obligation to purchase
any Optional Shares prior to an exercise of the Over-allotment Option.

                           (b) The Over-allotment Option granted hereby may be
exercised by the Representatives on behalf of the several Underwriters by giving
notice to the Custodian by a letter sent by registered or certified mail,
postage prepaid, telex, telegraph, telegram or facsimile (such notice to be
effective when received), addressed as provided in Section 13 hereof, setting
forth the number of Optional Shares to be purchased, the date and time for
delivery of and payment for the Optional Shares and stating that the Optional
Shares referred to therein are to be used for the purpose of covering
over-allotments in connection with the distribution and sale of the Firm Shares.
If such notice is given prior to the Closing Date, the

                                       15


<PAGE>

date set forth therein for such delivery and payment shall be the Closing Date.
If such notice is given on or after the Closing Date, the date set forth therein
for such delivery and payment shall be a date selected by the Representatives
that is within three full business days after the exercise of the Over-allotment
Option. The date and time set forth in such a notice is referred to herein as an
"Option Closing Date," and a closing held pursuant to such a notice is referred
to herein as an "Option Closing." Upon each exercise of the Over-allotment
Option, and on the basis of the representations, warranties, covenants and
agreements herein contained, and subject to the terms and conditions herein set
forth, the several Underwriters shall become severally, but not jointly,
obligated to purchase from the Selling Stockholders the number of Optional
Shares specified in each notice of exercise of the Over-allotment Option.

                           (c) The number of Optional Shares to be sold to each
Underwriter pursuant to each exercise of the Over-allotment Option shall be the
number that bears the same ratio to the aggregate number of Optional Shares
being purchased through such Over-allotment Option exercise as the number of
Firm Shares opposite the name of such Underwriter in Schedule I hereto bears to
the total number of all Firm Shares. Notwithstanding the foregoing, the number
of Optional Shares purchased and sold pursuant to each exercise of the
Over-allotment Option shall be subject to such adjustment as the Representatives
may approve to eliminate fractional shares and subject to the provisions for the
allocation of Optional Shares purchased for the purpose of covering
over-allotments set forth in the agreement entered into by and among the
Underwriters in connection herewith (the "Agreement Among Underwriters"). The
number of Optional Shares to be sold by each Selling Stockholder shall be the
respective number of Optional Shares obtained by multiplying the number of
Optional Shares specified in the notice to the Custodian referred to in Section
4(b) hereof by a fraction the numerator of which is the maximum number of
Optional Shares to be sold by such Selling Stockholders, as specified opposite
such Selling Stockholders name in Schedule II hereto, and the denominator of
which is the maximum number of all Optional Shares that may be sold pursuant to
this Agreement; subject, however, to such adjustment as the Representatives may
approve to eliminate fractional shares.

                           (d) Payment for the Optional Shares shall be made to
the Custodian by certified or official bank check payable to the order of the
Custodian in New York Clearing House funds, at the offices of Janney Montgomery
Scott Inc., 1801 Market Street, Philadelphia, Pennsylvania, or such other place
as shall be agreed upon by the Attorney-in-Fact and the Representatives, or in
immediately available funds wired to such account as the Custodian may specify
(with all costs and expenses incurred by the Underwriters in connection with
such settlement in immediately available funds, including, but not limited to,
interest or cost of funds and expenses, to be borne by the Company), against
delivery of the Optional Shares to the Representatives at the offices of Janney
Montgomery Scott Inc., 1801 Market Street, Philadelphia, Pennsylvania, or such
other place as shall be agreed upon by the Company, the Attorney-in-Fact and the
Representatives, for the respective accounts of the Underwriters. The
certificates representing the Optional Shares to be issued and delivered will be
in such denominations and registered in such names as the Representatives
request not

                                       16


<PAGE>

less than two full business days prior to the Option Closing Date, and will be
made available to the Representatives for inspection, checking and packaging at
the New York correspondent office of the Company's transfer agent not less than
one full business day prior to the Option Closing Date.

                  5. Certain Covenants and Agreements of the Company. The
Company covenants and agrees with the several Underwriters as follows:

                           (a) If Rule 430A of the Regulations is employed, the
Company will timely file the Prospectus pursuant to and in compliance with Rule
424(b) of the Regulations and will advise the Representatives of the time and
manner of such filing.

                           (b) The Company will not file or publish any
amendment or supplement to the Registration Statement, Preliminary Prospectus or
Prospectus at any time before the completion of the distribution of the Shares
by the Underwriters that is not (i) in compliance with the Regulations and (ii)
approved by the Representatives (such approval not to be unreasonably withheld
or delayed).

                           (c) The Company will advise the Representatives
immediately, and confirm such advice in writing, (i) when any post-effective
amendment to the Registration Statement is filed with the SEC, (ii) of the
receipt of any comments from the SEC concerning the Registration Statement,
(iii) when any post-effective amendment to the Registration Statement becomes
effective, or when any supplement to the Prospectus or any amended Prospectus
has been filed, (iv) of any request of the SEC for amendment or supplementation
of the Registration Statement or Prospectus or for additional information, (v)
during the period when the Prospectus is required to be delivered under the Act
and Regulations, of the happening of any event as a result of which the
Registration Statement or the Prospectus would include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading, (vi) during the period noted in (v) above, of the need
to amend the Registration Statement or supplement the Prospectus to comply with
the Act, (vii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, and (viii)
of the suspension of the qualification of any of the Shares for offering or sale
in any jurisdiction in which the Underwriters intend to make such offers or
sales, or of the initiation or threatening of any proceedings for any of such
purposes known to the Company. The Company will use its best efforts to prevent
the issuance of any such stop order or of any order preventing or suspending
such use and, if any such order is issued, to obtain as soon as possible the
lifting thereof.

                           (d) The Company has delivered to the Representatives,
without charge, copies of each Preliminary Prospectus. The Company will deliver
to the Representatives, without charge, from time to time during the period when
delivery of the Prospectus is required under the Act, such number of copies of
the Prospectus (as supplemented or amended) as the Representatives may
reasonably request. The Company

                                       17


<PAGE>

hereby consents to the use of such copies of the Preliminary Prospectus and the
Prospectus for purposes permitted by the Act, the Regulations and the securities
or Blue Sky laws of the states in which the Shares are offered by the several
Underwriters and by all dealers to whom Shares may be sold, both in connection
with the offering and sale of the Shares and for such period of time thereafter
as the Prospectus is required by the Act to be delivered in connection with
sales by any Underwriter or dealer. The Company has furnished or will furnish to
the Representatives three original signed copies of the Registration Statement
as originally filed and of all amendments and supplements thereto, whether filed
before or after the Effective Date, three copies of all exhibits filed therewith
and three signed copies of all consents and certificates of experts, and will
deliver to the Representatives such number of conformed copies of the
Registration Statement, including financial statements and exhibits, and all
amendments thereto, as the Representatives may reasonably request.

                           (e) The Company will comply with the Act, the
Regulations, the Exchange Act and the rules and regulations thereunder so as to
permit the continuance of sales of and dealings in the Shares for as long as may
be necessary to complete the distribution of the Shares as contemplated hereby.

                           (f) The Company will furnish such information as may
be required and otherwise cooperate in the registration or qualification of the
Shares, or exemption therefrom, for offering and sale by the several
Underwriters and by dealers under the securities or Blue Sky laws of such
jurisdictions in which the Representatives determine to offer the Shares, after
consultation with the Company, and will file such consents to service of process
or other documents necessary or appropriate in order to effect such registration
or qualification; provided, however, that no such qualification shall be
required in any jurisdiction where, solely as a result thereof, the Company
would be subject to taxation or qualification as a foreign corporation doing
business in such jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction where it
is not now so subject. The Company will, from time to time, prepare and file
such statements and reports as are or may be required to continue such
qualification in effect for so long a period as is required under the laws of
such jurisdictions for such offering and sale.

                           (g) Subject to subsection 5(b) hereof, in case of any
event, at any time within the period during which, in the opinion of counsel for
the Underwriters, a prospectus is required to be delivered under the Act and
Regulations, as a result of which any Preliminary Prospectus or the Prospectus,
as then amended or supplemented, would contain an untrue statement of a material
fact, or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, if it is necessary at any time to amend any Preliminary
Prospectus or the Prospectus to comply with the Act and Regulations or any
applicable securities or Blue Sky laws, the Company promptly will prepare and
file with the SEC, and any applicable state securities commission, an amendment,
supplement or document that will correct such statement or omission or effect
such compliance and will furnish to the several Underwriters

                                       18


<PAGE>

such number of copies of such amendment(s), supplement(s) or document(s) (in
form and substance satisfactory to the Representatives and counsel for the
Underwriters) as the Representatives may reasonably request. For purposes of
this subsection (g), the Company will provide such information to the
Representatives, the Underwriters' counsel and counsel to the Company as shall
be necessary to enable such persons to consult with the Company with respect to
the need to amend or supplement the Registration Statement, Preliminary
Prospectus or Prospectus or file any document, and shall furnish to the
Representatives and the Underwriters' counsel such further information as each
may from time to time reasonably request.

                           (h) The Company will make generally available to its
security holders not later than 45 days after the end of the period covered
thereby, an earnings statement of the Company (which need not be audited unless
required by the Act or the Regulations) that shall comply with Section 11(a) of
the Act and cover a period of at least 12 consecutive months beginning not later
than the first day of the Company's fiscal quarter next following the Effective
Date.

                           (i) For a period of five years following the
Effective Date, the Company will furnish to the Representatives copies of all
materials furnished by the Company to its Stockholders and all public reports
and all reports and financial statements furnished by the Company to the SEC
pursuant to the Exchange Act or any rule or regulation of the SEC thereunder.

                           (j) During the course of the distribution of the
Shares, the Company will not take, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Shares.

                           (k) The Company has caused each person listed on
Schedule V hereto to execute an agreement (a "Lock-up Agreement"), which Lock-up
Agreement shall be in form and substance satisfactory to the Representatives and
the Underwriters' counsel providing that through the 180th day after the
Effective Date, they will not, other than as provided for in the Underwriting
Agreement, without the prior written consent of Janney Montgomery Scott Inc.,
directly or indirectly offer to sell, sell, contract to sell or otherwise
transfer or dispose of any Common Shares, any options or warrants to purchase
Common Shares, or any securities convertible into or exercisable for any Common
Shares owned by them or with respect to which they have the power of disposition
(otherwise than in private transactions to their spouse, children, descendants,
parents or grandparents or to a trust for the benefit of one or more of such
persons, provided that each transferee and other person acquiring an interest in
any Common Shares during such 180-day period agrees in writing to be bound by
the provisions of the Lock-up Agreement). The Company has delivered such
agreements to Janney Montgomery Scott Inc. prior to the date of this Agreement.
Appropriate stop transfer instructions will be issued by the Company to the
Company's transfer agent for the Common Shares.

                                       19


<PAGE>

                           (l) The Company will not engage in any transaction
with affiliates (as defined in the Regulations) without the prior approval of a
majority of the members of its Board of Directors who do not have an interest in
such transaction other than in their capacity as directors of the Company.

                           (m) Except pursuant to the Exchange Agreements, for a
period of 180 days after the Effective Date, the Company will not, without the
prior written consent of Janney Montgomery Scott Inc. offer, sell, contract to
sell or otherwise dispose of any Common Shares or any securities convertible
into or exercisable for any Common Shares or, except up to       shares pursuant
to the Company's [1997 Stock Option Plan,] grant options to purchase any Common
Shares.

                           (n) The Company will use all reasonable efforts to
maintain the qualification or listing of the Common Shares (including, without
limitation, the Shares) on the Nasdaq National Market.

                  6. Payment of Fees and Expenses.

                           (a) Whether or not the transactions contemplated by
this Agreement are consummated and regardless of the reason this Agreement is
terminated, the Company will pay or cause to be paid, and bear or cause to be
borne, all costs and expenses incident to the performance of the obligations of
the Company and the Selling Stockholders under this Agreement, including: (i)
the fees and expenses of the accountants and counsel for the Company incurred in
the preparation of the Registration Statement and any post-effective amendments
thereto (including financial statements and exhibits), Preliminary Prospectuses
and the Prospectus and any amendments or supplements thereto, (ii) printing and
mailing expenses associated with the Registration Statement and any
post-effective amendments thereto, Preliminary Prospectus, the Prospectus, this
Agreement, the Agreement Among Underwriters, the Underwriters' Questionnaire
submitted to each of the Underwriters by Janney Montgomery Scott Inc. in
connection herewith, the power of attorney executed by each of the Underwriters
in favor of Janney Montgomery Scott Inc. in connection herewith, the Selected
Dealer Agreement and related documents and the preliminary Blue Sky memorandum
relating to the offering prepared by Pepper, Hamilton & Scheetz LLP, counsel to
the Underwriters (collectively with any supplement thereto, the "Preliminary
Blue Sky Memorandum"), (iii) the costs incident to the authentication, issuance,
sale and delivery of the Shares to the Underwriters, (iv) the fees, expenses and
all other costs of qualifying the Shares for sale under the securities or Blue
Sky laws of those states in which the Shares are to be offered or sold,
including, without limitation, the reasonable fees (not in excess of $10,000)
and expenses of Underwriters' counsel and such local counsel as may have been
reasonably required and retained for such purpose, (v) the fees, expenses and
other costs of, or incident to, securing any review or approvals by or from the
NASD, including the reasonable fees and expenses of the Underwriters' counsel,
(vi) the filing fees of the SEC, (vii) the cost of furnishing to the
Underwriters copies of the Registration Statement, Preliminary Prospectuses and
Prospectuses as herein provided, (viii) the Company's travel expenses in
connection with

                                       20


<PAGE>

meetings with the brokerage community and institutional investors, (ix) the
costs and expenses associated with settlement in same day funds (including, but
not limited to, interest or cost of funds expenses), if desired by the Company,
(x) any fees or costs payable to the Nasdaq Stock Market, Inc. as a result of
the offering, (xi) the cost of printing certificates for the Shares; (xii) the
cost and charges of any of the Company's transfer agent, (xiii) the costs (not
in excess of $25,000) of advertising the offering, including, without
limitation, with respect to the placement of "tombstone" advertisements in
publications selected by the Representatives, (xiv) the costs incident to the
consummation of the Exchange Agreements and (xv) all other costs and expenses
reasonably incident to the performance of the Company's and the Selling
Stockholders' obligations hereunder that are not otherwise specifically provided
for in this Section 6(a); provided, however, that, except as specifically set
forth in Section 6(c) hereof, (A) the Underwriters shall be responsible for
their out-of-pocket expenses, including those associated with meetings with the
brokerage community and institutional investors, other than the Company's travel
expenses, and the fees and expenses of their counsel for other than Blue Sky and
NASD representation, and (B) the Selling Stockholders shall be responsible for
any transfer or income taxes assessed with respect to the Shares sold by the
Selling Stockholders and any fees and expenses of the Selling Stockholders'
counsel and such other expenses as are agreed to by the Company and the Selling
Stockholders or as may be required by law or regulation, foreign or domestic.

                           (b) The Company shall pay as due any state
registration, qualification and filing fees and any accountable out-of-pocket
disbursements in connection with such registration, qualification or filing in
the states in which the Representatives determine to offer or sell the Shares.

                  7. Conditions of Underwriters' Obligations. The obligation of
each Underwriter to purchase and pay for the Firm Shares that it has agreed to
purchase hereunder on the Closing Date, and to purchase and pay for any Optional
Shares as to which it exercises its right to purchase under Section 4 on an
Option Closing Date, is subject at the date hereof, the Closing Date and any
Option Closing Date to the continuing accuracy and fulfillment of the
representations and warranties of the Company and the Selling Stockholders, to
the performance by the Company of its covenants and obligations hereunder, and
to the following additional conditions:

                           (a) If required by the Regulations, the Prospectus
shall have been filed with the SEC pursuant to Rule 424(b) of the Regulations
within the applicable time period prescribed for such filing by the Regulations;
on or prior to the Closing Date or any Option Closing Date, as the case may be,
no stop order or other order preventing or suspending the effectiveness of the
Registration Statement or the sale of any of the Shares shall have been issued
under the Act or any state securities law and no proceedings for that purpose
shall have been initiated or shall be pending or, to the Representatives'
knowledge or the knowledge of the Company, shall be contemplated by the SEC or
by any authority in any jurisdiction designated by the Representatives pursuant
to Section 5(f) hereof; and any request

                                       21


<PAGE>

on the part of the SEC for additional information shall have been complied with
to the reasonable satisfaction of counsel for the Underwriters.

                           (b) All corporate proceedings and other matters
incident to the authorization, form and validity of this Agreement, the Shares
and the form of the Registration Statement and the Prospectus, and all other
legal matters relating to this Agreement and the transactions contemplated
hereby, shall be satisfactory in all material respects to counsel to the
Underwriters. The Exchange shall have been consummated. The Company and the
Selling Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters. The Representatives shall have received from the Underwriters' counsel,
Pepper, Hamilton & Scheetz LLP, an opinion, dated as of the Closing Date and any
Option Closing Date, as the case may be, and addressed to the Representatives
individually and as the Representatives of the several Underwriters, which
opinion shall be satisfactory in all respects to the Representatives.

                           (c) The NASD shall have indicated that it has no
objection to the underwriting arrangements pertaining to the sale of any of the
Shares.

                           (d) The Representatives shall have received a copy of
an executed Lock-up Agreement from each person listed on Schedule V hereto.

                           (e) The Representatives shall have received at or
prior to the Closing Date from the Underwriters' counsel a memorandum or
summary, in form and substance satisfactory to the Representatives, with respect
to the qualification for offering and sale by the Underwriters of the Shares
under the securities or Blue Sky laws of such jurisdictions designated by the
Representatives pursuant to Section 5(f) hereof.

                           (f) On the Closing Date and any Option Closing Date,
there shall have been delivered to the Representatives signed opinions of Saul,
Ewing, Remick & Saul, counsel for the Company and the Selling Stockholders dated
as of each such date and addressed to the Representatives individually and as
the Representatives of the several Underwriters to the effect set forth in
Exhibit B hereto or as is otherwise reasonably satisfactory to the
Representatives.

                           (g) On the Closing Date and any Option Closing Date,
there shall have been delivered to the Representatives signed opinions of Ratner
& Prestia, patent counsel for the Company dated as of each such date and
addressed to the Representatives individually and as the Representatives of the
several Underwriters to the effect set forth in Exhibit C hereto or as is
otherwise reasonably satisfactory to the Representatives.

                           (h) At the Closing Date and any Option Closing Date:
(i) the Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto shall contain all
statements that are required to be stated

                                       22


<PAGE>

therein in accordance with the Act and the Regulations and in all material
respects shall conform to the requirements of the Act and the Regulations, and
neither the Registration Statement nor any post-effective amendment thereto nor
the Prospectus and any amendments or supplements thereto shall contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
(ii) since the respective dates as of which information is given in the
Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto, except as otherwise stated
therein, there shall have been no material adverse change in the properties,
condition (financial or otherwise), results of operations, stockholders' equity,
business or management of the Company and the Subsidiaries, taken as a whole,
from that set forth therein, whether or not arising in the ordinary course of
business, other than as referred to in the Registration Statement or Prospectus
(iii) since the respective dates as of which information is given in the
Registration Statement and the Prospectus or any amendment or supplement
thereto, there shall have been no event or transaction, contract or agreement
entered into by the Company or any of the Subsidiaries, other than in the
ordinary course of business and as set forth in the Registration Statement or
Prospectus, that has not been, but would be required to be, set forth in the
Registration Statement or Prospectus, (iv) since the respective dates as of
which information is given in the Registration Statement and any post-effective
amendment thereto and the Prospectus and any amendments or supplements thereto,
there shall have been no material adverse change, loss, reduction, termination
or non-renewal of any contract to which the Company or any Subsidiary is a party
and (v) no action, suit or proceeding at law or in equity, domestic or foreign,
shall be pending or threatened against the Company or any Subsidiary that would
be required to be set forth in the Prospectus, other than as set forth therein,
and no proceedings shall be pending or threatened against or directly affecting
the Company or any Subsidiary before or by any federal, state or other
commission, board or administrative agency, domestic or foreign, wherein an
unfavorable decision, ruling or finding would materially adversely affect the
properties, condition (financial or otherwise), results of operations,
stockholders' equity, or business of the Company or the Subsidiaries other than
as set forth in the Prospectus.

                           (i) The Representatives shall have received at the
Closing Date and any Option Closing Date certificates of the Chief Executive
Officer and the Chief Financial Officer of the Company dated as of the date of
the Closing Date or Option Closing Date, as the case may be, and addressed to
the Representatives, individually and as the Representatives of the several
Underwriters, to the effect that (i) the signers of the certificate have read
this Agreement and the representations and warranties of the Company in this
Agreement are true and correct in all material respects, as if made at and as of
the Closing Date or the Option Closing Date, as the case may be, and the Company
has complied in all material respects with all the agreements, fulfilled in all
material respects all the covenants and satisfied all the conditions on its part
to be performed, fulfilled or satisfied at or prior to the Closing Date or the
Option Closing Date, as the case may be, and (ii) the signers of the certificate
have examined the Registration Statement and the Prospectus and any amendments
or supplements thereto and that the conditions set forth in Section 7(h) of this
Agreement have been satisfied.

                                       23


<PAGE>

                           (j) The Representatives shall have received at the
Closing Date and any Option Closing Date certificates of or on behalf of the
Selling Stockholders dated as of the date of the Closing Date or Option Closing
Date, as the case may be, and addressed to the Representatives, individually and
as the Representatives of the several Underwriters, to the effect that (i) the
Selling Stockholders have read this Agreement and the representations and
warranties of the Selling Stockholders in this Agreement are true and correct in
all material respects, as if made at and as of the Closing Date or Option
Closing Date, as the case may be, and (ii) the Selling Stockholders have
examined the Registration Statement and the Prospectus and any amendments or
supplements thereto and that the conditions set forth in Section 7(h) of this
Agreement have been satisfied with respect to the Selling Stockholders.

                           (k) At the time this Agreement is executed and at the
Closing Date and any Option Closing Date the Representatives shall have received
a letter addressed to the Representatives individually and as the
Representatives of the several Underwriters, and in form and substance
satisfactory to the Representatives in all respects (including the non-material
nature of the changes or decreases, if any, referred to in clause (iii) below)
from KPMG Peat Marwick LLP dated as of the date of this Agreement, the Closing
Date or the Option Closing Date, as the case may be:

                                    (i) confirming that they are independent
certified public accountants within the meaning of the Act and the Regulations
and stating that the section of the Registration Statement under the caption
"Experts" is correct insofar as it relates to them;

                                    (ii) stating that, in their opinion, the
consolidated financial statements, schedules and notes of the Company and the
Subsidiaries audited by them and included in the Registration Statement comply
in form in all material respects with the applicable accounting requirements of
the Act and the Regulations;

                                    (iii) stating that, on the basis of
specified procedures, which included the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information, as described in SAS No. 71, Interim Financial Information (with
respect to the latest unaudited consolidated financial statements of the
Company), a reading of the latest available unaudited interim consolidated
financial statements of the Company (with an indication of the date of the
latest available unaudited interim financial statements), a reading of the
minutes of the meetings of the stockholders and the Board of Directors of the
Company and the Subsidiaries, and audit and compensation committees of such
Boards, if any, and inquiries to certain officers and other employees of the
Company and the Subsidiaries responsible for operational, financial and
accounting matters and other specified procedures and inquiries, nothing has
come to their attention that would cause them to believe that (A) the unaudited
consolidated financial statements of the Company included in the Registration
Statement, (1) do not comply in form in all material respects with the
applicable accounting requirements of the Act and the Regulations, or (2) any
material modifications should be made to such unaudited financial statements for
them to be in conformity with generally accepted accounting principles; (B) at
the date of the latest

                                       24


<PAGE>

available unaudited interim consolidated financial statements of the Company and
a specified date not more than five business days prior to the date of such
letter, there was any change in the capital stock or debt of the Company or any
decrease in net current assets, total assets or stockholders' equity of the
Company as compared with the amounts shown in the March 31, 1997 balance sheet
of the Company included in the Registration Statement, or that for the periods
from April 1, 1997 to the date of the latest available unaudited financial
statements of the Company and to a specified date not more than five days prior
to the date of the letter, there were any decreases, as compared to the
corresponding periods in the prior year, in revenues, gross profit, operating
income or total or per share amounts of net earnings, except in all instances
for changes, decreases or increases which the Registration Statement discloses
have occurred or may occur and except for such other changes, decreases or
increases which the Representatives shall in their sole discretion accept; or
(C) the unaudited pro forma consolidated financial statements included in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-X under the
Act and that the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements; and

                                    (iv) stating that they have compared
specific dollar amounts, numbers of shares and other numerical data and
financial information set forth in the Registration Statement that have been
specified by the Representatives prior to the date of this Agreement, to the
extent that such information is derived from the accounting records subject to
the internal control structure, policies and procedures of the Company's or the
Subsidiaries' accounting systems, or has been derived directly from such
accounting records by analysis or comparison or has been derived from other
records and analysis maintained or prepared by the Company or the Subsidiaries
with the results obtained from the application of readings, inquiries and other
appropriate procedures (which procedures do not constitute an audit in
accordance with generally accepted auditing standards) set forth in the letter,
and found them to be in agreement.

                           (l) There shall have been duly tendered to the
Representatives for the respective accounts of the Underwriters certificates
representing all of the Shares to be purchased by the Underwriters on the
Closing Date or any Option Closing Date, as the case may be.

                           (m) At the Closing Date and any Option Closing Date,
the Representatives shall have been furnished such additional documents,
information and certificates as they shall have reasonably requested.

                           (n) The issuance and sale of the Shares shall be
legally permitted under applicable Blue Sky or state securities laws so long as
such sales are made in accordance with the Preliminary Blue Sky Memorandum.

                  All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are satisfactory in
form and substance to the

                                       25


<PAGE>

Representatives and Underwriters' counsel. The Company and the Selling
Stockholders shall furnish the Representatives with such conformed copies of
such opinions, certificates, letters and other documents as they shall
reasonably request. If any condition to the Underwriters' obligations hereunder
to be fulfilled prior to or at the Closing Date or any Option Closing Date, as
the case may be, is not fulfilled, the Representatives may on behalf of the
several Underwriters, terminate this Agreement with respect to the Closing Date
or such Option Closing Date, as applicable, or, if it so elects, waive any such
conditions which have not been fulfilled or extend the time for their
fulfillment. Any such termination shall be without liability of the Underwriters
to the Company or the Selling Stockholders.

                  8. Indemnification and Contribution.

                           (a) The Company and each Selling Stockholder,
severally and not jointly, shall indemnify and hold harmless each Underwriter,
and each person, if any, who controls each Underwriter within the meaning of the
Act, against any and all loss, liability, claim, damage and expense whatsoever,
including, but not limited to, any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever or in connection with any
investigation or inquiry of, or action or proceeding that may be brought
against, the respective indemnified parties, arising out of or based upon any
breach of its, his or her respective representations and warranties made in this
Agreement and any untrue statements or alleged untrue statements of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, any application or other document (in this Section 8 collectively
called "application") executed by the Company and based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify all or any part of the Shares under the securities laws thereof or filed
with the SEC or the NASD, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing indemnity:

                                    (i) shall not apply to statements in or
omissions from any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any application or in any communication to the SEC, as the
case may be, made in reliance upon and in conformity with information supplied
to the Company in writing by or on behalf of any Underwriter through the
Representatives expressly for use therein; and

                                    (ii) with respect to any Preliminary
Prospectus, shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages, liabilities or expenses
purchased the Shares if, at or prior to the written confirmation of the sale of
such Shares, a copy of an amended Preliminary Prospectus or the Prospectus (or
the Prospectus as amended or supplemented) was delivered to such Underwriter but
was not sent, or delivered to such person and the untrue statement or omission
of a material fact contained in such Preliminary Prospectus was corrected in the

                                       26


<PAGE>

amended Preliminary Prospectus or Prospectus (or the Prospectus as amended or
supplemented).

This indemnity agreement will be in addition to any liability the Company and
the Selling Stockholders may otherwise have.

                           (b) Each Underwriter, severally and not jointly,
shall indemnify and hold harmless the Company, each of the directors of the
Company, each of the officers of the Company who shall have signed the
Registration Statement, each Selling Stockholder, and each other person, if any,
who controls the Company or a Selling Stockholder within the meaning of the Act
to the same extent as the foregoing indemnities from the Company and the Selling
Stockholders to the several Underwriters, but only with respect to any loss,
liability, claim, damage or expense resulting from statements or omissions, or
alleged statements or omissions, if any, made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any application or in any
communication to the SEC, as the case may be, made in reliance upon and in
conformity with information supplied to the Company in writing by or on behalf
of any Underwriter through the Representatives expressly for use therein. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.

                           (c) If any action, inquiry, investigation or
proceeding is brought against any person in respect of which indemnity may be
sought pursuant to any of the two preceding paragraphs, such person (hereinafter
called the "indemnified party") shall, promptly after notification of, or
receipt of service of process for, such action, inquiry, investigation or
proceeding, notify in writing the party or parties against whom indemnification
is to be sought (hereinafter called the "indemnifying party") of the institution
of such action, inquiry, investigation or proceeding and the indemnifying party,
upon the request of the indemnified party, shall assume the defense of such
action, inquiry, investigation or proceeding, including the employment of
counsel (reasonably satisfactory to such indemnified party) and payment of
expenses. No indemnification provided for in this Section 8 shall be available
to any indemnified party who shall fail to give such notice if the indemnifying
party does not have knowledge of such action, inquiry, investigation or
proceeding, to the extent that such indemnifying party has been materially
prejudiced by the failure to give such notice, but the omission to so notify the
indemnifying party shall not relieve the indemnifying party otherwise than under
this Section 8. Such indemnified party or controlling person shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless the employment of such counsel shall have been authorized in writing by
the indemnifying party in connection with the defense of such action. If such
indemnified party or parties shall have been advised by counsel that there may
be a conflict between the positions of the indemnifying party or parties and of
the indemnified party or parties or that there may be legal defenses available
to such indemnified party or parties different from or in addition to those
available to the indemnifying party or parties, the indemnified party or parties
shall be entitled to select counsel (such counsel, "Separate Counsel") to
conduct the defense to the extent determined by

                                       27


<PAGE>

such counsel to be necessary to protect the interests of the indemnified party
or parties and the reasonable fees and expenses of such Separate Counsel shall
be borne by the indemnifying party; provided, however, that if the indemnified
parties engage more than one Separate Counsel, then the indemnifying party's
liability with respect to such Separate Counsel shall be limited, in the
aggregate, to an amount equal to the highest amount of reasonable fees and
expenses charged or incurred by a single Separate Counsel, which amount shall be
divided among the indemnified parties on a pro rata basis in accordance with the
relative amounts of reasonable fees and expenses of their respective Separate
Counsel. Expenses covered by the indemnification in this Section 8 shall be paid
by the indemnifying party as they are incurred by the indemnified party.
Anything in this Section 8 to the contrary notwithstanding, the indemnifying
party shall not be liable for any settlement of any such claim effected without
its written consent.

                           (d) Each Selling Stockholder's aggregate liability
under this Section 8 shall be limited to an amount equal to the lesser of (i)
such Selling Stockholder's pro-rata portion of the total of all losses,
liabilities, claims, damages or expenses indemnified against (such pro-rata
portion being equal to the number of Shares sold by such Selling Stockholder,
divided by the total number of Shares sold by all of the Selling Stockholders)
or (ii) the net proceeds (before deducting expenses) received by such Selling
Stockholder from the sale of such Selling Stockholder's Shares pursuant to this
Agreement.

                           (e) If the indemnification provided for in this
Section 8 is unavailable to, or insufficient to hold harmless an indemnified
party under Sections 8(a) or (b) hereof in respect of any losses, liabilities,
claims, damages or expenses (or actions, inquiries, investigations or
proceedings in respect thereof) referred to therein, except by reason of the
provisos set forth in Section 8(a) hereof or the failure to give notice as
required in Section 8(c) hereof (provided that the indemnifying party does not
have knowledge of the action, inquiry, investigation or proceeding and to the
extent such party has been materially prejudiced by the failure to give such
notice), then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, liabilities,
claims, damages or expenses (or actions, inquiries, investigations or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company or the Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company or each Selling Stockholder on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, liabilities, claims or reasonable expenses (or actions,
inquiries, investigations or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company or each Selling Stockholder on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company or each
Selling Stockholder bears to the total

                                       28


<PAGE>

underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or a Selling Stockholder on the one hand or the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

                  The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 8(e) were determined by pro rata allocation (even if the Selling
Stockholders or the Underwriters were treated as one entity for such purpose) or
by any other method of allocation that does not take account of the equitable
considerations referred to above in this Section 8(e). The amount paid or
payable by an indemnified party as a result of the losses, liabilities, claims,
damages or reasonable expenses (or actions, inquiries, investigations or
proceedings in respect thereof) referred to above in this Section 8(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(e), (i) the
provisions of the Agreement Among Underwriters shall govern contribution among
Underwriters, (ii) no Underwriter (except as provided in the Agreement Among
Underwriters) shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter, and (iii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' and the Selling Stockholders' obligations
in this Section 8(e) to contribute are several in proportion to their individual
underwriting obligations and number of Shares sold, respectively, and not joint.

                  9. Representations and Agreements to Survive Delivery. Except
as the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements at the Closing Date and any Option Closing Date; and
such representations, warranties and agreements of the Underwriters, the Company
and the Selling Stockholders, including, without limitation, the indemnity and
contribution agreements contained in Section 8 hereof and the agreements
contained in Sections 6, 9, 10 and 13 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling person, and shall survive delivery of the Shares
and termination of this Agreement, whether before or after the Closing Date or
any Option Closing Date.

                  10.  Effective Date of This Agreement and Termination Hereof.

                           (a) This Agreement shall become effective at 10:00
a.m., Philadelphia, Pennsylvania time, on the first business day following the
Effective Date or at the time of the public offering by the Underwriters of the
Shares, whichever is earlier, except

                                       29


<PAGE>

that the provisions of Sections 6, 8, 9, 10 and 13 hereof shall be effective
upon execution hereof. The time of the public offering, for the purpose of this
Section 10, shall mean the time when any of the Shares are first released by the
Underwriters for offering by dealers. The Representatives may prevent the
provisions of this Agreement (other than those contained in Sections 6, 8, 9, 10
and 13) hereof from becoming effective without liability of any party to any
other party, except as noted below, by giving the notice indicated in Section
10(c) hereof before the time the other provisions of this Agreement become
effective.

                           (b) The Representatives shall have the right to
terminate this Agreement at any time prior to the Closing Date as provided in
Sections 7 and 11 hereof or if any of the following have occurred:

                                    (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company or its Subsidiaries, or the earnings, business affairs, management or
business prospects of the Company or its Subsidiaries, whether or not arising in
the ordinary course of business, that would, in the Representatives' reasonable
judgment, make the offering or delivery of the Shares impracticable;

                                    (ii) any outbreak of hostilities or other
national or international calamity or crisis or change in economic, political or
financial market conditions if the effect on the financial markets of the United
States of such outbreak, calamity, crisis or change is material and adverse and
would, in the Representatives' reasonable judgment, make the offering or
delivery of the Shares impracticable;

                                    (iii) suspension of trading generally in
securities on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq Stock Market or the over-the-counter market or limitation on prices
(other than limitations on hours or numbers of days of trading) for securities
or the promulgation of any federal or state statute, regulation, rule or order
of any court or other governmental authority that in the Representatives'
reasonable opinion materially and adversely affects trading on such exchange or
the over-the-counter market;

                                    (iv) declaration of a banking moratorium by
either federal or Pennsylvania state authorities;

                                    (v) the taking of any action by any federal,
state or local government or agency in respect of its monetary or fiscal affairs
that in the Representatives' reasonable opinion has a material adverse effect on
the securities markets in the United States; or

                                    (vi) trading in any securities of the
Company shall have been suspended or halted by the Nasdaq Stock Market or the
SEC.

                                       30


<PAGE>


                           (c) If the Representatives elect to prevent this
Agreement from becoming effective or to terminate this Agreement as provided in
this Section 10, the Representatives shall notify the Company and the Selling
Stockholders thereof promptly by telephone, telex, telegraph, telegram or
facsimile, confirmed by letter.

                  11.  Default by an Underwriter.

                           (a) If any Underwriter or Underwriters shall default
in its or their obligation to purchase Firm Shares or Optional Shares hereunder,
and if the Firm Shares or Optional Shares with respect to which such default
relates do not exceed the aggregate of 10% of the number of Firm Shares or
Optional Shares, as the case may be, that all Underwriters have agreed to
purchase hereunder, then such Firm Shares or Optional Shares to which the
default relates shall be purchased severally by the non-defaulting Underwriters
in proportion to their respective commitments hereunder.

                           (b) If such default relates to more than 10% of the
Firm Shares or Optional Shares, as the case may be, the Representatives may, in
their discretion, arrange for another party or parties (including a
non-defaulting Underwriter) to purchase such Firm Shares or Optional Shares to
which such default relates, on the terms contained herein. In the event that the
Representatives do not arrange for the purchase of the Firm Shares or Optional
Shares to which a default relates as provided in this Section 11, this Agreement
may be terminated by the Representatives or by the Company without liability on
the part of the several Underwriters (except as provided in Section 8 hereof) or
the Company (except as provided in Sections 6 and 8 hereof), but nothing herein
shall relieve a defaulting Underwriter of its liability, if any, to the other
several Underwriters and to the Company for damages occasioned by its default
hereunder.

                           (c) If the Firm Shares or Optional Shares to which
the default relates are to be purchased by the non-defaulting Underwriters, or
are to be purchased by another party or parties as aforesaid, the
Representatives or the Company shall have the right to postpone the Closing Date
or any Option Closing Date, as the case may be, for a reasonable period but not
in any event exceeding seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus or in
any other documents and arrangements, and the Company agrees to file promptly
any amendment to the Registration Statement or supplement to the Prospectus that
in the opinion of counsel for the Underwriters may thereby be made necessary.
The terms "Underwriters" and "Underwriter" as used in this Agreement shall
include any party substituted under this Section 11 with like effect as if it
had originally been a party to this Agreement with respect to such Firm Shares
and/or Optional Shares.

                  12. Information Furnished by Underwriters. The statement set
forth on the inside cover page regarding stabilization and under the caption
"Underwriting" (except for the [fourth to last and second to last]  paragraphs 
thereunder) in any Preliminary Prospectus and the Prospectus constitute the 
only written

                                       31


<PAGE>

information furnished by or on behalf of any Underwriter referred to in Sections
1(a)(ii) and 8 hereof.

                  13. Notice. All communications hereunder, except as herein
otherwise specifically provided, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, telexed, telegrammed, telegraphed or
telecopied and confirmed to such Underwriter, c/o Janney Montgomery Scott Inc.,
1801 Market Street, Philadelphia, Pennsylvania 19103, Attention: Mr. Michael J.
Mufson, with a copy to Pepper, Hamilton & Scheetz LLP, 3000 Two Logan Square,
Philadelphia, Pennsylvania 19103, Attention: Barry M. Abelson, Esquire; if sent
to the Company shall be mailed, delivered, telexed, telegrammed, telegraphed or
telecopied and confirmed to inTEST Corporation, 2 Pin Oak Lane, Cherry Hill, New
Jersey 08003, Attention: Alyn R. Holt, with a copy to Saul, Ewing, Remick &
Saul, 3800 Center Square West, Philadelphia, Pennsylvania 19102, Attention:
James W. Schwartz, Esquire; if sent to the Selling Stockholders shall be mailed,
delivered, telexed, telegrammed, telegraphed or telecopied and confirmed to Alyn
R. Holt or Hugh T. Regan, Jr., as Attorney-in-Fact, c/o inTEST Corporation, (at
the address listed above), with a copy to Saul, Ewing, Remick & Saul Attention:
James W. Schwartz, Esquire, (at the address listed above).

                  14. Parties. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the several Underwriters, the Company, the
Subsidiaries, the Selling Stockholders and the controlling persons, directors
and officers thereof, and their respective successors, assigns, heirs and legal
representatives, and no other person shall have or be construed to have any
legal or equitable right, remedy or claim under or in respect of or by virtue of
this Agreement or any provision herein contained. The terms "successors" and
"assigns" shall not include any purchaser of the Shares merely because of such
purchase.

                  In all dealings with the Company and the Selling Stockholders
under this Agreement, the Representatives shall act on behalf of each of the
several Underwriters, and the Company and the Selling Stockholders shall be
entitled to act and rely upon any statement, request, notice or agreement made
or given by the Representatives jointly or by Janney Montgomery Scott Inc. on
behalf of the Representatives.

                  15. Definition of Business Day. For purposes of this
Agreement, "business day" means any day on which the Nasdaq National Market is
opened for trading.

                  16. Counterparts. This Agreement may be executed in one or
more counterparts and by facsimile signatures and all such counterparts and
facsimile signatures will constitute one and the same instrument.

                  17. Construction. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
applicable to agreements made and performed entirely within such Commonwealth.
All references herein to the knowledge of the Company shall be deemed to include
the knowledge of each of the Subsidiaries.

                                       32


<PAGE>

                  If the foregoing correctly sets forth your understanding of
our agreement, please sign and return to the Company the enclosed duplicate
hereof, whereupon it will become a binding agreement in accordance with its
terms.


                        Very truly yours,

                        INTEST CORPORATION


                        By:________________________________________________
                                 Alyn R. Holt
                                 Chairman of the Board and Chief
                                 Executive Officer


                        THE SELLING STOCKHOLDERS


                        By: _______________________________________________
                                 Attorney-in-Fact, acting on behalf of each
                                 of the Selling Stockholders named in
                                 Schedule II hereto.



The foregoing Agreement is hereby confirmed 
and accepted as of the date first above written.

JANNEY MONTGOMERY SCOTT INC.
NEEDHAM & COMPANY, INC.
As Representatives of the Several Underwriters
named in Schedule I hereto

By: JANNEY MONTGOMERY SCOTT INC.


By:_____________________________________
         Authorized Representative


                                       33


<PAGE>

                                     JOINDER


                  Each of the Subsidiaries, intending to be legally bound,
hereby joins this Agreement for purposes of Sections 1 and 9 hereof.


                                              INTEST LIMITED

                                              ______________________________
                                              By:
                                              Title:


                                              INTEST KABUSHIKI KAISHA

                                              ______________________________
                                              By:
                                              Title:


                                              INTEST PTE, LIMITED

                                              ______________________________
                                              By:
                                              Title:


                                              [DELAWARE SUB]

                                              ______________________________
                                              By:
                                              Title:


                                              [DELAWARE SUB]

                                              ______________________________
                                              By:
                                              Title:

                                       34


<PAGE>

                                   SCHEDULE I

                            Schedule of Underwriters
                            ------------------------


                                               Number of Firm    Number of
                                               Shares to be      Optional Shares
Underwriter                                    Purchased         to be Purchased
- -----------                                    ---------         ---------------


Janney Montgomery Scott
         Inc., Philadelphia, PA
Needham & Company, Inc.
         New York, NY











Total                                        ============        ============





<PAGE>

                                   SCHEDULE II

                        Schedule of Selling Stockholders
                        --------------------------------



                                               Number of Firm    Number of
                                               Shares to be      Optional Shares
Selling Stockholder                            Sold              to be Sold     
- -------------------                            ---------         ---------------








      Total                                     ===========       =============




<PAGE>



                                  SCHEDULE III


                         List of Subsidiary Stockholders
                         -------------------------------







<PAGE>

                                   SCHEDULE IV


                          Stockholder NASD Affiliations
                          -----------------------------







<PAGE>



                                   SCHEDULE V


                   List of Persons Who Are to Deliver Lock-Up
               Agreements Called for Under Sections 5(k) and 7(d)
               --------------------------------------------------







<PAGE>




                                    EXHIBIT A


                    Subsidiaries of the Company, Jurisdiction
            of Incorporation and Percentage Ownership by the Company
            --------------------------------------------------------


Subsidiary                Jurisdiction                       % Ownership
- ----------                ------------                       -----------












<PAGE>



                                    EXHIBIT B

                     Matters to be Covered in the Opinion of
                           Saul, Ewing, Remick & Saul
                             Counsel for the Company


                  (1) The Company is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, with full power and
authority to conduct all of the activities conducted by it, own or lease all of
the assets owned or leased by it, and conduct its business all as described in
the Registration Statement and the Prospectus; and is duly licensed or qualified
to do business and in good standing as a foreign corporation in all
jurisdictions, domestic or foreign, in which the nature of the activities
conducted by it and/or the character of the assets owned and leased by it makes
such qualification or license necessary.

                  (2) Each of the Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, domestic or foreign, with full power and authority to conduct all
of the activities conducted by it, own or lease all of the assets owned or
leased by it, and conduct its business all as described in the Registration
Statement and the Prospectus; and is duly licensed or qualified to do business
and in good standing as a foreign corporation in all jurisdictions, domestic or
foreign, in which the nature of the activities conducted by it and/or the
character of the assets owned and leased by it makes such qualification or
license necessary;

                  (3) No authorization, approval, consent or license of any
governmental or regulatory body, domestic or foreign, except as may be required
under the Act or the blue sky laws of the various jurisdictions, is required in
connection with the (A) authorization, issuance, transfer, sale or delivery of
the Shares to be sold by the Company; (B) execution, delivery and performance of
the Agreement by the Company or (C) taking of any action contemplated herein or
in the Registration Statement or the Prospectus, including, without limitation,
the Exchange Agreements, or if so required, all such authorizations, approvals,
consents and licenses, specifying the same, have been obtained and are in full
force and effect and have been disclosed to the Representatives.

                  (4) The Company has authorized and outstanding capital stock,
stock options and other derivative securities as set forth in the Registration
Statement and the Prospectus. The outstanding shares of the Common Stock,
including the shares of the Common Stock issued pursuant to the Exchange
Agreements, have been, and all of the Shares will be, upon issuance and payment
therefor, duly authorized, validly issued, fully paid and nonassessable, are not
subject to preemptive rights and have not been issued in violation of any
statutory preemptive rights or similar contractual rights. The holders of shares
of the Common Stock are not and will not be subject to personal liability solely
by reason of being such holders. The issue and sale of the Shares by the Company
have been duly and validly authorized. The Common Stock has been duly authorized
for quotation or listing on the Nasdaq National Market. All issuances, including
the shares of Common Stock issued



<PAGE>



pursuant to the Exchange Agreement, and repurchases of securities of the Company
and the Subsidiaries by the Company and the Subsidiaries were exempt from, or
complied in all material respects with, the provisions of all applicable
federal, state and foreign securities and corporate laws.

                  (5) No holder of any securities of the Company has the right
to require registration of shares of the Common Stock or other securities of the
Company. The description of the Common Stock and the Shares contained in the
Registration Statement and the Prospectus conforms to the rights set forth in
the instruments or certificates defining the same and is in conformity with the
requirements of the Act and the Regulations.

                  (6) The Company is not an "investment company" as defined in
Section 3(a) of the Investment Company Act and, if the Company conducts its
business as set forth in the Registration Statement and the Prospectus, will not
become an "investment company" and will not be required to register under the
Investment Company Act; the Company has not, prior to the date of the
Prospectus, been required to make any filings pursuant to the Exchange Act.

                  (7) The Company has full power and authority to enter into the
Agreement, and the Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, except insofar as rights to indemnity
or contribution may be limited by applicable law or equitable principles, and
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, arrangement or similar laws affecting creditors'
rights generally or by general equitable principles.

                  (8) Nothing has come to such counsel's attention to give such
counsel reason to believe that any of the representations and warranties of the
Company or the Selling Stockholders contained in the Agreement or in any
certificate or document contemplated under the Agreement to be delivered is not
true or correct or that any of the covenants and agreements contained in the
Agreement or in any such certificate or document to be performed on the part of
the Company or any of the respective conditions contained in the Agreement or in
any such certificate or document, or set forth in the Registration Statement or
the Prospectus, to be fulfilled or complied with by the Company has not been or
will not be duly and timely performed, fulfilled or complied with in any
material respect.

                  (9) The Registration Statement and the Prospectus, and each
amendment thereof or supplement thereto, comply as to form and substance with,
and are responsive in all material respects to, the requirements of the Act and
the Rules and Regulations (except that no opinion need be expressed as to
matters concerning financial statements and other financial data and related
notes, schedules and financial or statistical data contained in the Registration
Statement or the Prospectus).

                  (10) Such counsel has participated in the preparation of the
Registration Statement and the Prospectus and nothing has come to the attention
of such counsel to lead it to believe that, both as of the Effective Date and as
of the Closing Date and any Option



<PAGE>



Closing Date, either the Registration Statement or the Prospectus, or any
amendment or supplement thereto, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (except that no opinion
need be expressed as to matters concerning financial statements and other
financial data and related notes, schedules and financial or statistical data
contained in the Registration Statement or the Prospectus).

                  (11) Such counsel has read all contracts specifically
enumerated in the Registration Statement and the Prospectus, and such contracts
are fairly summarized or described therein, conform in all material respects to
the descriptions thereof contained therein, and are filed as exhibits thereto,
if required, and there are no contracts or documents required to be so
summarized or disclosed or so filed which have not been so summarized or
disclosed or so filed.

                  (12) The Registration Statement has become effective under the
Act, and (A) no stop order suspending the effectiveness of the Registration
Statement has been issued and (B) to the best of such counsel's knowledge, no
proceedings for that purpose have been instituted or are threatened, pending or
contemplated. The opinion delivered at the Closing Date shall state that all
filings required by Rule 424 and Rule 430A of the Rules and Regulations have
been made, to the extent that such rules are utilized.

                  (13) The Exchange has been consummated and the Shares to be
issued pursuant thereto have been duly issued in accordance therewith. The
outstanding shares of capital stock or other evidence of ownership of the
Subsidiaries are duly authorized, validly issued, fully paid and non-assessable,
are not subject to preemptive rights and have not been issued in violation of
any statutory preemptive rights or similar contractual rights. The Company, to
the knowledge of such counsel, owns 100% of the capital stock of the
Subsidiaries, in all cases, free and clear of all liens, encumbrances and
security interests.

                  (14) The execution and delivery of the Agreement by the
Company and the Subsidiaries, the consummation by the Company and the
Subsidiaries of the transactions herein contemplated, including, without
limitation, the Exchange Agreements, and the compliance with the terms of this
Agreement do not and will not conflict with or result in a breach of any of the
terms or provisions of or violate or constitute a default under, the Certificate
of Incorporation or Bylaws or other constituent documents, domestic or foreign,
of the Company or the Subsidiaries, or any indenture, mortgage or other
agreement or instrument to which the Company or the Subsidiaries is a party or
by which the Company or the Subsidiaries or any material portion of its
properties is bound of which counsel has knowledge, or any existing statute,
rule or regulation, or any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having jurisdiction
over the Company or the Subsidiaries or any material portion of its properties.

                  (15) All real and personal property described in the
Registration Statement and Prospectus as being leased by the Company or the
Subsidiaries is held by the Company under valid leases.



<PAGE>




                  (16) There are no legal proceedings pending or, to the
knowledge of such counsel, threatened against the Company or the Subsidiaries
which are required to be disclosed in the Registration Statement, except as
described therein.

                  (17) Except as described in the Prospectus, the Company or the
Subsidiaries does not own any interest in any corporation, partnership, joint
venture, trust or other business entity.

                  (18) Each Selling Stockholder has full power and authority to
enter into the Agreement and the Power of Attorney and Custody Agreement (the
"Custody Agreement"). All authorizations and consents necessary for the
execution and delivery of the Agreement and the Custody Agreement on behalf of
each Selling Stockholder have been given. The delivery of the Shares on behalf
of each Selling Stockholder pursuant to the terms of the Agreement and payment
therefor by the Underwriters will pass marketable title to the Shares to the
Underwriters, free and clear of all liens, encumbrances and claims.

                  (19) Each of the Agreement and the Custody Agreement has been
duly authorized, executed and delivered by each Selling Stockholder, is a valid
and binding agreement of each Selling Stockholder and the Agreement and the
Custody Agreement are enforceable against each Selling Stockholder in accordance
with the terms thereof, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, arrangement or similar laws affecting creditors'
rights generally or by general equitable principals.

                  (20) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body, domestic
or foreign, is required in connection with the authorization, issuance,
transfer, sale or delivery of the Shares by or on behalf of each Selling
Stockholder, in connection with the execution, delivery and performance of the
Agreement and the Custody Agreement by each Selling Stockholder or in connection
with the taking by or on behalf of each Selling Stockholder of any action
contemplated thereby or, if so required, all such consents, approvals,
authorizations and orders, specifying the same, have been obtained and are in
full force and effect, except such as have been obtained under the Act or the
Regulations.

                  (21) The execution and delivery of the Agreement and the
Custody Agreement by each Selling Stockholder, the consummation by each Selling
Stockholder of the transactions herein contemplated and the compliance by each
Selling Stockholder with the terms thereof do not and will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of any Selling Stockholder pursuant to the terms or provisions of, or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under or result in the acceleration of any obligation under, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which any Selling Stockholder is a
party or by which it or any of its properties is bound or affected which is
known to such counsel, or any, domestic or foreign, statute, judgment, ruling,
decree, order, rule or regulation of any, domestic or foreign, court or other
governmental agency or body applicable to each Selling Stockholder.



<PAGE>




                  (22) There are no transfer or similar taxes payable in
connection with the sale and delivery of the Shares by each Selling Stockholder
to the Underwriters, except as specified in such opinion.

                  In rendering such opinions, counsel for the Company may set
forth that as to certain matters of fact, such counsel is relying on one or more
certificates of public officials, governmental agencies or officers of the
Company. In addition, as to matters of law, counsel for the Company may rely as
to matters involving the application of laws other than the laws of the United
States, the laws of New Jersey, the laws of Pennsylvania, the laws of Delaware
and jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance satisfactory to the Underwriters' counsel) of
other counsel reasonably acceptable to the Underwriters' counsel, familiar with
the applicable laws.

                  Unless the context clearly indicates otherwise, the term
"Company" as used in this Exhibit, shall include the Subsidiaries. The opinion
of counsel for the Company shall include a statement to the effect that it may
be relied upon by counsel for the Underwriters in their opinion delivered to the
Underwriters.



<PAGE>



                                    EXHIBIT C

                     Matters to be Covered in the Opinion of
                                Ratner & Prestia
                         Patent Counsel for the Company

                  (1) The statements in the Prospectus under the headings "Risk
Factors -- Uncertainty of Patents and Proprietary Rights; Risk of Litigation";
"Business -- Patents and Other Proprietary Rights"; "Business - Competition" and
"Experts" insofar as such statements constitute summary descriptions of the
legal matters, documents, proceedings or descriptions referred to therein,
fairly present the information called for with respect to such legal matters,
documents, proceedings or descriptions. To our knowledge, except as described in
the Prospectus, neither the Company nor any of its subsidiaries has received any
notice of infringement of or conflict with (and we know of no infringement of or
conflict with) asserted rights of others in any patents, trade secrets,
copyrights, trademarks, service marks or trade names. To our knowledge, except
as set forth in the Prospectus, there is no infringement or violation by others
of any of the Company's patents, trade secrets, copyrights, trademarks, service
marks or trade names. Except as set forth in the Prospectus, to our knowledge
there are no legal or governmental proceedings pending or threatened related to
patents, trade secrets, copyrights, trademarks, service marks or trade names of
others to which the Company or any of its subsidiaries is a party or, except for
ordinary proceedings initiated by the Company or any of its subsidiaries seeking
statutory rights, registrations or certifications from governmental authorities,
to which any intellectual property of the Company or any of its subsidiaries is
subject.

                  (2) To our knowledge there is no contract or other document
relating to patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks or
trade names of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Prospectus that is not
filed or described as required.

                  (3) Attached hereto as Schedule A is an accurate and complete
list describing all patents issued to, and all patent applications filed on
behalf of, the Company or any of its subsidiaries with the U.S. Patent and
Trademark Office or with patent authorities in other countries. It is our
opinion that, based on the declarations of the named inventor(s) in the
applications and our investigation of the facts concerning the inventions by
such inventor(s), the named inventor(s) are the original and first inventor(s)
of the subject matter which is claimed. We are not aware of any other patents
issued to, or patent applications filed by or on behalf of, the Company or any
of its subsidiaries. On the basis of our review of assignments executed by the
inventors, it is our opinion that all the inventors have assigned all their
right, title and interest in the applications and the patents listed on Schedule
A to the Company or its subsidiaries. It is our opinion that the patents listed
on Schedule A are valid and enforceable and we are not aware of any information
that would render the patents, or any of the claims therein, invalid or
unenforceable. Further, except as set forth in the Prospectus, we are not aware
of any actions brought or threatened by any party alleging the invalidity or
unenforceability of the patents listed



<PAGE>


on Schedule A. It is our opinion that neither U.S. Patent 4,230,985, issued on
October 28, 1980 to Matrone et al., nor U.S. Patent 4,284,311, issued on August
8, 1981 to Forster et al., whether such patents are taken alone, together or in
combination with any other prior art known to us, will result in the
invalidation of any of the claims of U.S. Patent 4,589,815, issued on May 20,
1986, which is currently undergoing reexamination in the U.S. Patent and
Trademark Office. It is our opinion that the Company has not or is not
infringing U.S. Patent 4,230,985, issued on October 28, 1980 to Matrone et al.,
nor U.S. Patent 4,284,311, issued on August 8, 1981 to Forster et al.

                  (4) To our knowledge: (i) the Company and its subsidiaries
own, or are licensed or otherwise possess adequate rights to use, all patents,
trademarks, trademark registrations, service marks, service mark registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
(collectively "Intellectual Property") which are used in or necessary for the
conduct of their respective businesses as described in the Prospectus, except as
otherwise described in the Prospectus, no claims have been asserted by any
person to the use of any Intellectual Property or challenging or questioning the
validity or effectiveness of any Intellectual Property; and (ii) the use, in
connection with the business and operations of the Company and its subsidiaries,
of any Intellectual Property does not infringe on the rights of any person to
the extent that an unfavorable decision, ruling or finding as to such
infringement could materially adversely affect the business, properties,
financial condition or results of operations of the Company and its subsidiaries
taken as a whole.

                  (5) We hereby consent to the reference to our firm under the
heading "Experts" in the Prospectus.






<PAGE>

                          CERTIFICATE OF INCORPORATION

                                       of

                               inTEST CORPORATION

                  The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the purposes
hereinafter stated, under the provisions and subject to the requirements of the
laws of the State of Delaware (particularly Chapter 1, Title 8 of the Delaware
Code and the acts amendatory thereof and supplemental thereto, and known,
identified and referred to as the "General Corporation Law of the State of
Delaware"), hereby states that:

         FIRST: Name. The name of the corporation (hereinafter called the
"Corporation") is: inTEST Corporation.

         SECOND: Registered Office and Agent. The address of its registered
office in the State of Delaware is Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801. The name of its registered agent at such address is
CT Corporation System.

         THIRD: Purpose and Powers. The nature of the business and the objects
or purposes to be transacted, promoted or carried on are:

                  To engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of the State of Delaware and
to do all things and exercise all powers, rights and privileges that
 a business
corporation may now or hereafter be organized or authorized to do or to exercise
under the laws of the State of Delaware.

         FOURTH: Capital.

                  A. Authorized Shares. The total number of shares of stock that
the Corporation shall have authority to issue is 25,000,000 shares, consisting
of 20,000,000 shares of Common Stock, having a par value of $.01 per share, and
5,000,000 shares of Preferred Stock, having a par value of $.01 per share.

                  B. The Preferred Stock. The Preferred Stock may be issued from
time to time in one or more series of any number of shares of Preferred Stock
herein authorized. Each series of Preferred Stock shall be distinctly designated
by letter or descriptive words. Authority is hereby vested in the Board of
Directors to issue from time to time the Preferred Stock as Preferred Stock of
any series and in connection with the creation of such series to fix by
resolution or resolutions providing for the issue of shares thereof the voting
rights, if any, the designations, preferences and relative, participating,
optional or other special rights, and, qualifications, or restrictions of such
series to the full extent now or hereafter permitted by this Certificate of
Incorporation and laws of the State of Delaware.



<PAGE>




                  C. Voting.

                           1. Voting Rights. In addition to any voting rights to
                  which they may be entitled under the laws of the State of
                  Delaware, the holders of shares of the Preferred Stock (to the
                  extent they have voting rights) and the holders of shares of
                  the Common Stock shall vote, as a single class, upon all
                  matters upon which stockholders are entitled to vote. Each
                  share of Common Stock shall be entitled to one vote. The
                  holders of shares of stock which do not have voting rights
                  shall not have the right to vote in the election of directors
                  or for any other purpose and shall not be entitled to notice
                  of any meeting of stockholders.

                           2. Cumulative Voting. There shall be no cumulative
                  voting rights.

                           3. Voting by Ballot. Elections of directors need not
                  be by ballot unless the Bylaws of the Corporation provide
                  otherwise.

                  D. Preemptive Rights. Except as otherwise provided in this
Certificate of Incorporation, the holders of the Preferred Stock and the holders
of the Common Stock shall have no preemptive rights to subscribe for any shares
of any class of stock of the Corporation whether now or hereafter authorized.

                  E. Dividends. The holders of the Common Stock shall be
entitled, in any calendar year, to receive, when, as and if declared by the
Board of Directors, out of funds legally available for the payment of dividends,
such dividends as may be declared or paid or set apart for payment to the
holders of the Common Stock.

                  F. Liquidation and Dissolution. Except as otherwise provided
in this Certificate of Incorporation, upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders of
the Common Stock shall be ratably entitled to receive, out of the assets of the
Corporation available for distribution to the holders of the Common Stock,
whether from surplus or earnings, the remaining assets and funds of the
Corporation. Neither the consolidation nor merger of the Corporation with or
into any other corporation or corporations, nor the sale of all or substantially
all of the assets of the Corporation shall be deemed to be a liquidation or
dissolution or winding up of the Corporation within the meaning of this
paragraph.

                  G. Repurchase of Stock. Upon any repurchase or reacquisition
of the shares of the Common Stock, the shares so repurchased or reacquired shall
resume and have the status of authorized and unissued shares of Common Stock,
and the number of shares of Common Stock which the Corporation shall have
authority to issue shall not be decreased by the repurchase or reacquisition of
such shares.


                                       -2-


<PAGE>



         FIFTH: Incorporator. The name and mailing address of the incorporator
is as follows:

                Name                                    Mailing Address
                ----                                    ---------------
         James W. Schwartz                         Saul, Ewing, Remick & Saul
                                                   3800 Centre Square West
                                                   Philadelphia, PA  19102

         SIXTH: Term. The Corporation is to have perpetual existence.

         SEVENTH: Liability of Stockholders. The stockholders shall not be
personally liable for the payment of the debts of the Corporation.

         EIGHTH: Additional Powers of Board of Directors. The Board of Directors
shall have power, without stockholder action, to make Bylaws for the Corporation
and to amend, alter or repeal any Bylaws.

                  The powers and authorities herein conferred upon the Board of
Directors are in furtherance and not in limitation of those conferred by the
laws of the State of Delaware. In addition to the powers and authorities herein
or by statute expressly conferred upon it, the Board of Directors may exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, subject, nevertheless, to the provisions of the laws of the
State of Delaware, of this Certificate of Incorporation and of the Bylaws of the
Corporation.

         NINTH: Elimination of Certain Liability of Directors. A director of the
Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived any improper personal benefit. If the Delaware
General Corporation Law is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then, without
further action by the Board of Directors or the stockholders, the liability of a
director of the Corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended. Any repeal or
modification of this Article NINTH by the stockholders of the Corporation shall
not adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.

         TENTH: Elections; Books of the Corporation. Elections of directors need
not be by written ballot unless the bylaws of the Corporation shall so provide.
The books of the Corporation may be kept (subject to any requirement of law)
outside the State of Delaware at

                                       -3-


<PAGE>


such place or places as may be designated from time to time by the Board of
Directors or in the bylaws of the Corporation.

         ELEVENTH: Right to Amend Certificate of Incorporation. The Corporation
reserves the right at any time and from time to time to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation. In
addition, other provisions, authorized by the laws of the State of Delaware at
the time in force, may be added or inserted in this Certificate of
Incorporation, in the manner now or hereafter prescribed by law. All rights,
preferences and privileges of whatever nature conferred upon stockholders,
directors or any other person whomsoever by and pursuant to this Certificate of
Incorporation in its present form or as hereafter amended shall be subject to
the right of the Corporation reserved in this Article ELEVENTH.

         THE UNDERSIGNED, being the sole incorporator hereinbefore named, does
hereby make this Certificate of Incorporation, declaring and acknowledging that
this is my act and deed and the facts herein stated are true, and accordingly
have hereunto set my hand this 21st day of March, 1997.



                                        /s/ James W. Schwartz
                                        --------------------------------
                                        James W. Schwartz



                                       -4-






<PAGE>


                                     BYLAWS

                                       OF

                               inTEST CORPORATION


                                    ARTICLE I

                                  Stockholders

         Section 1.1. Annual Meetings. An annual meeting of stockholders shall
be held for the election of directors at such date, time and place, either
within or without the State of Delaware, as may be designated by resolution of
the Board of Directors from time to time. Any other proper business may be
transacted at the annual meeting.

         Section 1.2. Special Meetings. Special meetings of stockholders for any
purpose or purposes may be called at any time by the Board of Directors pursuant
to a resolution approved by a majority of the Board of Directors or at the
request in writing of stockholders owning at least fifty percent (50%) of the
voting power of the shares of stock of the corporation entitled to vote at such
meeting. The business transacted at any special meeting of the stockholders
shall be limited to the purposes stated in the notice for the meeting
transmitted to stockholders.

         Section 1.3. Notice of Meetings. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given that shall state the place, date and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for
 which the meeting is
called. Unless otherwise provided by law, the certificate of incorporation or
these bylaws, the written notice of any meeting shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting. If mailed, such notice shall be
deemed to be given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
corporation.

         Section 1.4. Adjournments. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.

         Section 1.5. Quorum. Except as otherwise provided by law, the
certificate of incorporation or these bylaws, at each meeting of stockholders
the presence in person or by proxy of the holders of a majority in voting power
of the outstanding shares of stock entitled



<PAGE>



to vote at the meeting shall be necessary and sufficient to constitute a quorum.
In the absence of a quorum, the stockholders so present and entitled to vote
thereat may, by majority vote, adjourn the meeting from time to time in the
manner provided in Section 1.4 of these bylaws until a quorum shall attend.
Shares of the corporation's stock owned by it or another corporation if a
majority of the shares entitled to vote in the election of directors of such
other corporation is held, directly or indirectly, by the corporation, shall
neither be entitled to vote nor be counted for quorum purposes; provided,
however, that the foregoing shall not limit the right of the corporation or any
subsidiary of the corporation to vote stock, including but not limited to its
own stock, held by it in a fiduciary capacity.

         Section 1.6. Organization. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or in his absence by the Vice
Chairman of the Board, if any, or in his absence by the President, or in his
absence by a Vice President, or in the absence of the foregoing persons by a
chairman designated by the Board of Directors, or in the absence of such
designation by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the person presiding over the
meeting may appoint any person to act as secretary of the meeting. The person
presiding over the meeting shall announce at the meeting of stockholders the
date and time of the opening and the closing of the polls for each matter upon
which the stockholders will vote.

         Section 1.7. Voting; Proxies. Except as otherwise provided by the
certificate of incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one (1) vote for each share of stock held
by him which has voting power upon the matter in question. Each stockholder
entitled to vote at a meeting of stockholders or to express consent or dissent
to corporate action in writing without a meeting may authorize another person or
persons to act for him by proxy, but no such proxy shall be voted or acted upon
after three (3) years from its date, unless the proxy provides for a longer
period. A proxy shall be irrevocable if it states that it is irrevocable and if,
and only as long as, it is coupled with an interest sufficient in law to support
an irrevocable power. A stockholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing with the
Secretary of the corporation an instrument in writing revoking the proxy or by
delivering a proxy in accordance with applicable law bearing a later date to the
Secretary of the corporation. Voting at meetings of stockholders need not be by
written ballot. At all meetings of stockholders for the election of directors a
plurality of the votes cast shall be sufficient to elect. All other elections
and questions shall, unless otherwise provided by law, the certificate of
incorporation or these bylaws, be decided by the affirmative vote of the holders
of a majority in voting power of the shares of stock which are present in person
or by proxy and entitled to vote thereon.

         Section 1.8. Fixing Date for Determination of Stockholders of Record.
In order that the corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change,

                                       -2-


<PAGE>



conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted by
the Board of Directors, and which record date: (i) in the case of determination
of stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than sixty (60)
nor less than ten (10) days before the date of such meeting; (ii) in the case of
determination of stockholders entitled to express consent to corporate action in
writing without a meeting, shall not be more than ten (10) days from the date
upon which the resolution fixing the record date is adopted by the Board of
Directors; and (iii) in the case of determination of stockholders for the
purpose of any other lawful action, shall not be more than sixty (60) days prior
to such other action. If no record date is fixed: (x) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; (y) the record date
for determining stockholders entitled to express consent to corporate action in
writing without a meeting, when no prior action of the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation in accordance with applicable law, or, if prior action by the Board
of Directors is required by law, shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action; and
(z)the record date for determining stockholders for the purpose of any other
lawful action, shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.

         Section 1.9. List of Stockholders Entitled to Vote. The Secretary shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present. Upon the willful
neglect or refusal of the directors to produce such a list at any meeting for
the election of directors, they shall be ineligible for election to any office
at such meeting. Except as otherwise provided by law, the stock ledger shall be
the only evidence as to who are the stockholders entitled (i) to examine the
stock ledger, the list of stockholders entitled to vote at the meeting or the
books of the corporation, (ii) to vote in person or by proxy at any meeting of
stockholders, or (iii) to express consent or dissent to corporate action in
writing without a meeting.

                                       -3-


<PAGE>




         Section 1.10. Action By Consent of Stockholders. Unless otherwise
restricted by the certificate of incorporation, any action required or permitted
to be taken at any annual or special meeting of the stockholders may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and shall be
delivered (by hand or by certified or registered mail, return receipt requested)
to the corporation by delivery to its registered office in the State of
Delaware, its principal place of business, or an officer or agent of the
corporation having custody of the book in which minutes of proceedings of
meetings of stockholders are recorded. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing and who, if the
action had been taken at a meeting, would have been entitled to receive notice
of the meeting if the record date for such meeting had been the date that
written consents signed by a sufficient number of stockholders to take the
action were delivered to the corporation as provided herein.

         Section 1.11. Inspectors of Election. The corporation may, and shall if
required by law, in advance of any meeting of stockholders, appoint one (1) or
more inspectors of election, who may be employees of the corporation, to act at
the meeting or any adjournment thereof and to make a written report thereof. The
corporation may designate one (1) or more persons as alternate inspectors to
replace any inspector who fails to act. In the event that no inspector so
appointed or designated is able to act at a meeting of the stockholders, the
person presiding at the meeting shall appoint one (1) or more inspectors to act
at the meeting. Each inspector, before entering upon the discharge of his or her
duties, shall take and sign an oath to execute faithfully the duties of
inspector with strict impartiality and according to the best of his or her
ability. The inspector or inspectors so appointed or designated shall (i)
ascertain the number of shares of capital stock of the corporation outstanding
and the voting power of each such share, (ii) determine the shares of capital
stock of the corporation represented at the meeting and the validity of proxies
and ballots, (iii) count all votes and ballots, (iv) determine and retain for a
reasonable period a record of the disposition of any challenges made to any
determination by the inspectors, and (v) certify their determination of the
number of shares of capital stock of the corporation represented at the meeting
and such inspector's or inspectors' count of all votes and ballots. Such
certification and report shall specify such other information as may be required
by law. In determining validity and counting of proxies and ballots cast at any
meeting of stockholders of the corporation, the inspectors may consider such
information as is permitted by applicable law. No person who is a candidate for
an office at an election may serve as an inspector at such election.

         Section 1.12. Conduct of Meetings. The Board of Directors of the
corporation may adopt by resolution such rules and regulations for the conduct
of the meeting of stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the person presiding over any meeting of stockholders shall have the
right and authority to prescribe such rules, regulations and procedures and to

                                       -4-


<PAGE>



do all such acts as, in the judgment of such person, are appropriate for the
proper conduct of the meeting. Such rules, regulations or procedures, whether
adopted by the Board of Directors or prescribed by the person presiding over the
meeting, may include, without limitation, the following: (i) the establishment
of an agenda or order of business for the meeting; (ii) rules and procedures for
maintaining order at the meeting and the safety of those present; (iii)
limitations on attendance at or participation in the meeting to stockholders of
record of the corporation, their duly authorized and constituted proxies or such
other persons as the person presiding over the meeting shall determine; (iv)
restrictions on entry to the meeting after the time fixed for the commencement
thereof; and (v) limitations on the time allotted to questions or comments by
participants. Unless and to the extent determined by the Board of Directors or
the person presiding over the meeting, meetings of stockholders shall not be
required to be held in accordance with the rules of parliamentary procedure.

                                   ARTICLE II

                               Board of Directors

         Section 2.1. Number; Qualifications. The Board of Directors shall
consist of such number of members as may be determined from time to time by
resolution of the Board of Directors which number shall not be less than five
(5). Directors need not be stockholders of the corporation.

         Section 2.2. Election; Resignation; Removal; Vacancies. Each director
shall hold office until his successor is elected and qualified or until his
earlier death, resignation, or removal. At the first annual meeting of
stockholders and at each annual meeting thereafter, the stockholders shall elect
directors each of whom shall hold office until his successor is elected and
qualified or until his earlier death, resignation, or removal. Any director may
resign at any time upon written notice to the corporation. Any newly created
directorship or any vacancy occurring in the Board of Directors for any cause
may be filled by a majority of the remaining members of the Board of Directors,
although such majority is less than a quorum, or by a plurality of the votes
cast at a meeting of stockholders, and each director so elected shall hold
office until the expiration of the term of office of the director whom he has
replaced, or until his successor is elected and qualified, or until his earlier
death, resignation, or removal.

         Section 2.3. Regular Meetings. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board of Directors may from time to time determine, and if
so determined notices thereof need not be given.

         Section 2.4. Special Meetings. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the Chairman of the Board, the President, the
Secretary, or on the written request of one half or more of the members of the
Board of Directors stating the purpose or purposes for which

                                       -5-


<PAGE>



such meeting is requested. Notice of a special meeting of the Board of Directors
shall be given by the person or persons calling the meeting at least twenty-four
(24) hours before the special meeting either personally, or by courier,
telephone, facsimile or mail.

         Section 2.5. Telephonic Meetings Permitted. Members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
bylaw shall constitute presence in person at such meeting.

         Section 2.6. Quorum; Vote Required for Action. At all meetings of the
Board of Directors a majority of the whole Board of Directors shall constitute a
quorum for the transaction of business. Except in cases in which the certificate
of incorporation, these bylaws or applicable law otherwise provides, the vote of
a majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.

         Section 2.7. Organization. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in his absence by the
Vice Chairman of the Board, if any, or in his absence by the President, or in
the absence of the foregoing persons by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his absence the person
presiding over the meeting may appoint any person to act as secretary of the
meeting.

         Section 2.8. Informal Action by Directors. Unless otherwise restricted
by the certificate of incorporation or these bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board of
Directors or such committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the Board
of Directors or committee.


                                   ARTICLE III

                                   Committees

         Section 3.1. Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, designate one (1) or more
committees, each committee to consist of one (1) or more of the directors of the
corporation. The Board of Directors may designate one (1) or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of the committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such committee,
to the

                                       -6-


<PAGE>



extent permitted by law and to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it. A majority of the members shall constitute a quorum
and all matters shall be determined by a majority vote of the members present.

         Section 3.2. Committee Minutes. Each committee shall keep regular
minutes of its meetings and shall file such minutes and all written consents
executed by its members with the Secretary of the corporation.

         Section 3.3. Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules
each committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to Article II of these bylaws.


                                   ARTICLE IV
                                    
                                    Officers

         Section 4.1. Executive Officers; Election; Qualifications; Term of
Office; Resignation; Removal; Vacancies. The Board of Directors shall elect a
President and Secretary, and it may, if it so determines, choose a Chairman of
the Board and a Vice Chairman of the Board from among its members. The Board of
Directors may also choose one (1) or more Vice Presidents, one (1) or more
Assistant Secretaries, a Treasurer and one (1) or more Assistant Treasurers, and
one (1) or more other officers having such titles, and such powers and duties as
the Board may provide and, to the extent not so provided, such powers and duties
as may generally pertain to such office(s). Each such officer shall hold office
until the first meeting of the Board of Directors after the annual meeting of
stockholders next succeeding his election, and until his successor is elected
and qualified or until his earlier death, resignation, or removal. Any officer
may resign at any time upon written notice to the corporation. The Board of
Directors may remove any officer with or without cause at any time, but such
removal shall be without prejudice to the contractual rights of such officer, if
any, with the corporation. Any number of offices may be held by the same person.
Any vacancy occurring in any office of the corporation by death, resignation,
removal, or otherwise may be filled for the unexpired portion of the term by the
Board of Directors at any regular or special meeting.

         Section 4.2.  Powers and Duties of Executive Officers.

                       (i) President. The President shall be the chief executive
officer of the corporation. Subject to the provisions of the certificate of
incorporation, these bylaws,

                                       -7-


<PAGE>



and the direction of the Board of Directors, the President shall have the
responsibility for the general management and control of the business and
affairs of the corporation and shall perform all duties and have all powers
which are commonly incident to the office of chief executive or which are
delegated to him or her by the Board of Directors. The President shall have
power to execute in the name of the corporation all contracts, agreements,
deeds, bonds, mortgages, and other obligations and instruments of the
corporation which are authorized, and to affix the corporate seal thereto. The
President shall have general supervision and direction of all of the other
officers, employees, and agents of the corporation.

                       (ii) Vice President. Each Vice President, if any, shall
have such powers and perform such duties as the Board of Directors may from time
to time prescribe. The Vice President (if only one (1) Vice President is chosen
by the Board) or one (1) Vice President designated by the Board (if two (2) or
more Vice Presidents are chosen by the Board of Directors) shall perform the
duties and exercise the powers of the President in the event of the President's
absence or disability.

                       (iii) Treasurer. The Treasurer, if any, shall have the
responsibility for maintaining the financial records of the corporation. The
Treasurer shall make such disbursements of the funds of the corporation as are
authorized and shall render from time to time an account of all such
transactions and of the financial condition of the corporation. The Treasurer
shall have such other powers and perform such other duties as the Board of
Directors may from time to time prescribe.

                       (iv) Secretary. The Secretary shall issue all authorized
notices for, and shall keep minutes of, all meetings of the stockholders and of
the Board of Directors. The Secretary shall have charge of the corporate books
and shall have such other powers and perform such other duties as the Board of
Directors may from time to time prescribe.

                       (v) Assistant Secretary and Assistant Treasurer. Each
Assistant Secretary, if any, and each Assistant Treasurer, if any, shall have
such powers and perform such duties as the Board of Directors may from time to
time prescribe.

                       (vi) Delegation of Authority. The Board of Directors may
from time to time delegate the powers or duties of any officer to any other
officers or agents, notwithstanding any provision hereof.


                                    ARTICLE V

                                      Stock

         Section 5.1. Certificates. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the corporation by the Chairman
or Vice Chairman of the Board 

                                       -8-


<PAGE>



of Directors, if any, or the President or a Vice President, and by the Treasurer
or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the
corporation representing the number of shares owned by him in the corporation.
Any of or all the signatures on the certificate may be a facsimile. In case any
officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent, or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue.

         Section 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of
New Certificates. The corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the corporation may require the owner of the lost,
stolen or destroyed certificate, or his legal representative, to give the
corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.

         Section 5.3. Registered Stockholders. The corporation shall be entitled
to recognize the exclusive right of a person or persons registered on its books
as the owner of shares to receive dividends and to vote as such owner, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by law.


                                   ARTICLE VI

                                 Indemnification

         Section 6.1. Right to Indemnification. The corporation shall indemnify
and hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was or is made or
is threatened to be made a party or is otherwise involved in any threatened,
pending, or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding") by reason of the fact that he,
or a person for whom he is the legal representative, is or was a director or
officer of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust, other enterprise or nonprofit entity,
including service with respect to employee benefit plans (an "indemnitee"),
against all liability and loss suffered (including, without limitation, fines
and amounts paid in settlement) and expenses (including, without limitation,
attorneys' fees) reasonably incurred by such indemnitee in connection with such
action, suit or proceeding (including any such expenses incurred in connection
with such person's successful application for, or any action brought to enforce
such person's right to indemnification or advancement of expenses, provided for
in this Article) to the extent the power to so indemnify has been or

                                       -9-


<PAGE>



may be granted by statute. For this purpose, (i) the Board of Directors by a
majority vote of the directors who are not parties to such action, suit or
proceeding, even though less than a quorum, or (ii) if there are no such
directors, or if such directors so direct, independent legal counsel in a
written opinion, or (iii) the stockholders, may, and upon the request of any
such person shall, determine in each case whether or not the applicable
standards set forth in any statute have been met. The corporation shall be
required to indemnify an indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if the initiation of such proceeding
(or part thereof) by the indemnitee was authorized by the Board of Directors of
the corporation.

         Section 6.2. Advancement of Expenses. The corporation shall pay the
expenses (including, without limitation, attorneys' fees) incurred by a director
or officer of the corporation in defending any proceeding referred to in Section
6.1 in advance of its final disposition; provided, however, that the payment of
expenses incurred by such person in advance of the final disposition of such
proceeding shall be made only upon receipt of an undertaking by such person to
repay all amounts advanced if it should ultimately be determined that such
person is not entitled to be indemnified under this Article or otherwise, except
that no such advance payment will be required if it is determined by the Board
of Directors that there is a substantial probability that such person will not
be able to repay the advance payments. Expenses incurred in such circumstances
by other employees and other persons who may be entitled to indemnification
hereunder may be paid in advance by the corporation upon such terms and
conditions, if any, as the Board of Directors deems appropriate.

         Section 6.3. Non-Exclusivity of Rights. The rights conferred on any
person by this Article shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision of the
certificate of incorporation, these bylaws, agreement, vote of stockholders or
disinterested directors or otherwise.

         Section 6.4. Other Indemnification. The corporation's obligation, if
any, to indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, enterprise or nonprofit entity shall be reduced by any amount such person
may collect (i) as indemnification from such other corporation, partnership,
joint venture, trust, enterprise or nonprofit entity or (ii) as beneficiary of,
or insured under, any policy of insurance insuring against such liabilities and
expenses covered by this Article.

         Section 6.5. Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this Article shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.

                                      -10-


<PAGE>

                                   ARTICLE VII

                                  Miscellaneous

         Section 7.1. Fiscal Year. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.

         Section 7.2. Seal. The corporate seal shall have the name of the
corporation inscribed thereon and shall be in such form as may be approved from
time to time by the Board of Directors.

         Section 7.3. Waiver of Notice of Meetings of Stockholders, Directors
and Committees. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of any
regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.

         Section 7.4. Interested Directors; Quorum. No contract or transaction
between the corporation and one (1) or more of its directors or officers, or
between the corporation and any other corporation, partnership, association, or
other organization in which one (1) or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the director or officer is present at
or participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose, if: (i) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
his relationship or interest and as to the contract or transaction are disclosed
or are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (iii) the contract or transaction is fair as to the corporation as of the
time it is authorized, approved or ratified, by the Board of Directors, a
committee thereof, or the stockholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or transaction.

         Section 7.5. Form of Records. Any records maintained by the corporation
in the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, 
               
                                      -11-


<PAGE>

microphotographs, or any other information storage device, provided that the
records so kept can be converted into clearly legible form within a reasonable
time.


         Section 7.6. Amendment of By-Laws. These by-laws may be altered or
repealed, and new bylaws made, by the Board of Directors to the extent permitted
by the certificate of incorporation, but the stockholders may make additional
bylaws and may alter and repeal any bylaws whether adopted by them or otherwise.

                                      -12-





<PAGE>

                       Amended and Restated Loan Agreement


                  THIS AMENDED AND RESTATED LOAN AGREEMENT (the "Agreement"), is
entered into as of June ___, 1996, between INTEST CORPORATION, a New Jersey
corporation (the "Borrower"), and PNC BANK, NATIONAL ASSOCIATION (the "Bank").

                  The Borrower and the Bank, with the intent to be legally
bound, agree as follows:

                  1. Loan. The following loans, lines of credit and credit
facilities (if one or more, collectively, the "Loan"), made for the purpose
indicated below shall be subject to and governed by this Agreement:


<TABLE>
<CAPTION>

           Date and Type                                            Purpose
           -------------                                            -------
<S>                                                         <C>    
$1,500,000 Committed Line of Credit                           Working capital
originally extended February 26, 1993

$200,000 Five Year Term Loan dated                            Finance equipment and new office furniture
as of even date herewith
</TABLE>


The Loans are or will be evidenced by promissory notes of the Borrower (if one
or more, collectively, the "Note") acceptable to the Bank, which shall set forth
the interest rate, repayment and other provisions, the terms of which are
incorporated into this Agreement by reference.

                  2. Security. The security for repayment of the Loan shall
include but not be limited to the collateral, guaranties and other documents
heretofore, contemporaneously or hereafter executed and delivered
 to the Bank
(the "Security Documents"), which shall secure repayment of the Loan, the Note
and all other loans, advances, debts, liabilities, obligations, covenants and
duties owing by the Borrower to the Bank of any kind or nature, present or
future, whether or not evidenced by any note, guaranty or other instrument,
whether arising under any agreement, instrument or document, whether or not for
the payment of money, whether arising by reason of an extension of credit,
opening of a letter of credit, loan or guarantee or in any other manner, whether
arising out of overdrafts on deposit or other accounts or electronic funds
transfers (whether through automatic clearing houses or otherwise) or out of the
Bank's non-receipt of or inability to collect funds or otherwise not being made
whole in connection with depository transfer check or other similar
arrangements, whether direct or indirect (including those acquired by assignment
or participation), absolute or contingent, joint or several, due or to become
due, now existing or hereafter arising, and any amendments, extensions, renewals
or increases and all costs and expenses of the Bank incurred in the
documentation, negotiations modification, enforcement, collection or otherwise
in connection with any of the foregoing, including but not limited to reasonable
attorneys' fees and expenses (hereinafter referred to collectively as the
"Obligations"). Unless expressly provided to the contrary in documentation for
any other loan or loans, it is the express intent of the Bank and the Borrower
that all



<PAGE>



Obligations including those included in the Loan be cross-collateralized and
cross-defaulted, such that collateral securing any of the Obligations shall
secure repayment of all Obligations and a default under any Obligation shall be
a default under all Obligations.

This Agreement, the Note and the Security Documents are collectively referred to
as the "Loan Documents".

                  3. Representations and Warranties. The Borrower hereby makes
the following representations and warranties, which shall be continuing in
nature and remain in full force and effect until the Obligations are paid in
full, and which shall be true and correct except as otherwise set forth on the
Addendum attached hereto and incorporated herein by reference (the "Addendum"):

                     3.1 Existence, Power and Authority. If not a natural
person, the Borrower is duly organized, validly existing and in good standing
under the laws of the State of its incorporation or organization and has the
power and authority to own and operate its assets and to conduct its business as
now or proposed to be carried on, and is duly qualified, licensed and in good
standing to do business in all jurisdictions where its ownership of property or
the nature of its business requires such qualification or licensing. The
Borrower is duly authorized to execute and deliver the Loan Documents, all
necessary action to authorize the execution and delivery of the Loan Documents
has been property taken, and the Borrower is and will continue to be duly
authorized to borrow under this Agreement and to perform all of the other terms
and provisions of the Loan Documents.

                     3.2 Financial Statements. If the Borrower is not a natural
person, it has delivered or caused to be delivered its most recent balance
sheet, income statement and statement of cash flows, or if the Borrower is a
natural person, its personal financial statement and tax returns (as applicable,
the "Historical Financial Statements"). The Historical Financial Statements are
true, complete and accurate in all material respects and fairly present the
financial condition, assets and liabilities, whether accrued, absolute,
contingent or otherwise and the results of the Borrower's operations for the
period specified therein. The Historical Financial Statements have been prepared
in accordance with generally accepted accounting principles ("GAAP")
consistently applied from period to period subject in the case of interim
statements to normal year-end adjustments and to any comments and notes
acceptable to the Bank in its sole discretion.

                     3.3 No Material Adverse Change. Since the date of the most
recent Financial Statements, the Borrower has not suffered any damage,
destruction or loss, and no event or condition has occurred or exists, which has
resulted or could result in a material adverse change in its business, assets,
operations, financial condition or results of operation.

                     3.4 Binding Obligations. The Borrower has full power and
authority to enter into the transactions provided for in this Agreement and has
been duly authorized to do so by appropriate action of its Board of Directors if
the Borrower is a corporation, all its general

                                       -2-


<PAGE>



partners if the Borrower is a partnership or otherwise as may be required by
law, charter, other organizational documents or agreements; and the Loan
Documents, when executed and delivered by the Borrower, will constitute the
legal, valid and binding obligations of the Borrower enforceable in accordance
with their terms.

                     3.5 No Defaults or Violations. There does not exist any
Event of Default under this Agreement or any default or violation by the
Borrower of or under any of the terms, conditions or obligations of: (i) its
partnership agreement if the Borrower is a partnership, its articles or
certificate of incorporation, regulations or bylaws if the Borrower is a
corporation or its other organizational documents as applicable; (ii) any
indenture, mortgage, deed of trust, franchise, permit, contract, agreement, or
other instrument to which it is a party or by which it is bound; or (iii) any
law, regulation, ruling, order, injunction, decree, condition or other
requirement applicable to or imposed upon it by any law, the action by any court
or any governmental authority or agency; and the consummation of this Agreement
and the transactions set forth herein will not result in any such default or
violation.

                     3.6 Title to Assets. The Borrower has good and marketable
title to the assets reflected on the most recent Financial Statements, free and
clear of all liens and encumbrances, except for (i) current taxes and
assessments not yet due and payable, (ii) liens and encumbrances, if any,
reflected or noted in the Historical Financial Statements, (iii) assets disposed
of by the Borrower in the ordinary course of business since the date of the most
recent Financial Statements, and (iv) those liens or encumbrances specified on
the Addendum.

                     3.7 Litigation. There are no actions, suits, proceedings or
governmental investigations pending or, to the knowledge of the Borrower,
threatened against the Borrower, none of which could result in a material
adverse change in its business, assets, operations, financial condition or
results of operations and there is no basis known to the Borrower for any
action, suit, proceedings or investigation which could result in such a material
adverse change. All pending or threatened litigation against the Borrower is
listed on the Addendum.

                     3.8 Tax Returns. The Borrower has filed all returns and
reports that are required to be filed by it in connection with any federal,
state or local tax, duty or charge levied, assessed or imposed upon it or its
property or withheld by it, including unemployment, social security and similar
taxes and all of such taxes, have been either paid or adequate reserve or other
provision has been made.

                     3.9 Employee Benefit Plans. Each employee benefit plan as
to which the Borrower may have any liability complies in all material respects
with all applicable provisions of the Employee Retirement Income Security Act of
1974 ("ERISA"), including minimum funding requirements, and (i) no Prohibited
Transaction (as defined under ERISA) has occurred with respect to any such plan,
(ii) no Reportable Event (as defined under Section 4043 of ERISA) has occurred
with respect to any such plan which would cause the Pension Benefit Guaranty
Corporation to institute proceedings under Section 4042 of ERISA, (iii) the
Borrower

                                       -3-


<PAGE>



has not withdrawn from any such plan or initiated steps to do so, and (iv) no
steps have been taken to terminate any such plan.

                     3.10 Environmental Matters. The Borrower is in compliance,
in all material respects, with all Environmental Laws, including, without
limitation, all Environmental Laws in jurisdictions in which the Borrower owns
or operates, or has owned or operated, a facility or site, stores Collateral,
arranges or has arranged for disposal or treatment of hazardous substances,
solid waste or other waste, accepts or has accepted for transport any hazardous
substances, solid waste or other wastes or holds or has held any interest in
real property or otherwise. Except as otherwise disclosed on the Addendum, no
litigation or proceeding arising under, relating to or in connection with any
Environmental Law is pending or, to the best of the Borrower's knowledge,
threatened against the Borrower, any real property which the Borrower holds or
has held an interest or any past or present operations of the Borrower. No
release, threatened release or disposal of hazardous waste, solid waste or other
wastes is occurring, or to the best of the Borrower's knowledge has occurred,
on, under or to any real property in which the Borrower holds any interest or
performs any of its operations, in violation of any Environmental Law. As used
in this Section, "litigation or proceeding" means any demand, claim notice,
suit, suit in equity, action, administrative action, investigation or inquiry
whether brought by a governmental authority or other person, and "Environmental
Laws" means all provisions of laws, statutes, ordinances, rules, regulations,
permits, licenses, judgments, writs, injunctions, decrees, orders, awards and
standards promulgated by any governmental authority concerning health, safety
and protection of, or regulation of the discharge of substances into, the
environment.

                     3.11 Intellectual Property. The Borrower owns or is
licensed to use all patents, patent rights, trademarks, trade names, service
marks, copyrights, intellectual property, technology, know-how and processes
necessary for the conduct of its business as currently conducted that are
material to the condition (financial or otherwise), business or operations of
the Borrower.

                     3.12 Regulatory Matters. No part of the proceeds of the
Loan will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board
of Governors of the Federal Reserve System as now and from time to time in
effect or for any purpose which violates the provisions of the Regulations of
such Board of Governors.

                     3.13 Solvency. As of the date hereof and after giving
effect to the transactions contemplated by the Loan Documents, (i) the aggregate
value of the Borrower's assets will exceed its liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities), (ii) the
Borrower will have sufficient cash flow to enable it to pay its debts as they
mature, and (iii) the Borrower will not have unreasonably small capital for the
business in which it is engaged.


                                       -4-


<PAGE>



                  3.14 Disclosure. None of the Loan Documents contains or will
contain any untrue statement of material fact or omits or will omit to state a
material fact necessary in order to make the statements contained in this
Agreement or the Loan Documents not misleading. There is no fact known to the
Borrower which materially adversely affects or, so far as the Borrower can now
foresee, might materially adversely affect the business, assets, operations,
financial condition or results of operation of the Borrower and which has not
otherwise been fully set forth in this Agreement or in the Loan Documents.

                  4. Affirmative Covenants. The Borrower agrees that from the
date of execution of this Agreement until all Obligations have been fully paid
and any commitments of the Bank to the Borrower have been terminated, the
Borrower will:

                     4.1 Books and Records. Maintain books and records in
accordance with GAAP and give representatives of the Bank access thereto at all
reasonable times, including permission to examine, copy and make abstracts from
any of such books and records and such other information as the Bank may from
time to time reasonably request, and the Borrower will make available to the
Bank for examination copies of any reports, statements or returns which the
Borrower may make to or file with any governmental department, bureau or agency,
federal or state.

                     4.2 Interim Financial Statements; Certificate of No
Default. Furnish the Bank within forty-five (45) days after the end of each
quarter the Borrower's Financial Statements for such period, in reasonable
detail, certified by an authorized officer of the Borrower and prepared in
accordance with GAAP applied from period to period. The Borrower shall also
deliver a certificate as to its compliance with applicable financial covenants
for the period then ended and whether any Event of Default exists, and, if so,
the nature thereof and the corrective measures the Borrower proposes to take. If
the Borrower is not a natural person, "Financial Statements" means the
Borrower's consolidated and, if required by the Bank in its sole discretion,
consolidating balance sheets, income statements and statements of cash flows for
the year, month or quarter together with year-to-date figures and comparative
figures for the corresponding periods of the prior year. If the Borrower is a
natural person, "Financial Statements" means the Borrower's personal financial
statement and tax returns.

                     4.3 Annual Financial Statements. Furnish the Borrower's
Financial Statements to the Bank within ninety (90) days of each fiscal and
semiannual period. Those Financial Statements will be prepared on a reviewed
basis in accordance with GAAP by an independent certified public accountant
selected by the Borrower and satisfactory to the Bank. Audited Financial
Statements shall contain the unqualified opinion of an independent certified
public accountant and its examination shall have been made in accordance with
GAAP consistently applied from period to period.

                     4.4 Payment of Taxes and Other Charges. Pay and discharge
when due all indebtedness and all taxes, assessments, charges, levies and other
liabilities imposed upon the Borrower, its income, profits, property or
business, except those which currently are being

                                       -5-


<PAGE>



contested in good faith by appropriate proceedings and for which the Borrower
shall have set aside adequate reserves or made other adequate provision with
respect thereto acceptable to the Bank in its sole discretion.

                     4.5 Maintenance of Existence, Operation and Assets. Do all
things necessary to maintain, renew and keep in full force and effect its
organizational existence and all rights, permits and franchises necessary to
enable it to continue its business; continue in operation in substantially the
same manner as at present; keep its properties in good operating condition and
repair; and make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto.

                     4.6 Insurance. Maintain with financially sound and
reputable insurers, insurance with respect to its property and business against
such casualties and contingencies, of such types and in such amounts as is
customary for established companies engaged in the same or similar business and
similarly situated. In the event of a conflict between the provisions of this
Section and the terms of any Security Documents relating to insurance, the
provisions in the Security Documents will control.

                     4.7 Compliance with Laws. Comply with all laws applicable
to the Borrower and to the operation of its business (including any statute,
rule or regulation relating to employment practices and pension benefits or to
environmental, occupational and health standards and controls).

                     4.8 Bank Accounts. Establish and maintain at the Bank the
Borrower's primary depository accounts. Borrower shall at all times maintain a
balance in its bank accounts at Bank of not less $50,000.

                     4.9 Financial Covenants. Comply with all of the financial
and other covenants, if any, set forth on the Addendum.

                     4.10 Additional Reports. Provide prompt written notice to
the Bank of the occurrence of any of the following (together with a description
of the action which the Borrower proposes to take with respect thereto): (i) any
Event of Default or potential Event of Default; (ii) any litigation filed by or
against the Borrower, (iii) any Reportable Event or Prohibited Transaction with
respect to any Employee Benefit Plan(s) (as defined in ERISA) or (iv) any event
which might result in a material adverse change in the business, assets,
operations, financial condition or results of operation of the Borrower.

                  5. Negative Covenants. The Borrower covenants and agrees that
from the date of execution of this Agreement until all Obligations have been
fully paid and any commitments of the Bank to the Borrower have been terminated,
the Borrower will not, except as set forth in the Addendum, without the Bank's
prior written consent:


                                       -6-


<PAGE>



                     5.1 Indebtedness. Incur any indebtedness for borrowed money
other than: (i) the Loan and any subsequent indebtedness to the Bank; and (ii)
existing indebtedness disclosed on the Borrower's Historical Financial
Statements referred to in Section 3.2.

                     5.2 Liens and Encumbrances. Except as provided in Section
3.6, create, assume or permit to exist any mortgage, pledge, encumbrance or
other security interest or lien upon any assets now owned or hereafter acquired
or enter into any arrangement for the acquisition of property subject to any
conditional sales agreement in an aggregate amount in excess of $100,000
annually during any fiscal period.

                     5.3 Guarantees. Guarantee, endorse or become contingently
liable for the obligations of any person, firm or corporation, except in
connection with the endorsement and deposit of checks in the ordinary course of
business for collection.

                     5.4 Loans or Advances. Purchase or hold beneficially any
stock, other securities or evidences of indebtedness of any loans or advances
to, or make any investment or acquire any interest whatsoever in, any other
person, firm or corporation, except investments disclosed on the Borrower's
Historical Financial Statements or acceptable to the Bank in its sole
discretion.

                     5.5 Merger or Transfer of Assets. Merge or consolidate with
or into any person, firm or corporation or lease, sell, transfer or otherwise
dispose of all, or substantially all, of its property, assets and business
whether now owned or hereafter acquired which, at the time of such disposition
has a fair market value in excess of $100,000.

                     5.6 Change in Business, Management or Ownership. Make or
permit any material change in the nature of its business as carried on as of the
date hereof, in the composition of its current executive management, or in its
equity ownership.

                     5.7 Dividends. Declare or pay any dividends on or make any
distribution with respect to any class of its equity or ownership interest, or
purchase, redeem, retire or otherwise acquire any of its equity, except for the
amount of federal and state income tax of the principals of the Borrower
attributable to the earnings of the Borrower where the Borrower is an S
corporation or a partnership.

                     5.8 Lease. Lease, as lessee, real or personal property with
an aggregate annual rental value in excess of $50,000 (present leases excluded).

                     5.9 Capital Expenditures. Make capital expenditures for
fixed assets in an aggregate amount in excess of $100,000 annually during any
fiscal period.

                  6. Events of Default.  The occurrence of any of the following 
will be deemed to be an "Event of Default":


                                       -7-


<PAGE>



                     6.1 Covenant Default. The Borrower shall default in the
performances of any of the covenants or agreements contained in this Agreement.

                     6.2 Breach of Warranty. Any Financial Statement,
representation, warranty or certificate made or furnished by the Borrower to the
Bank in connection with this Agreement shall be false, incorrect or incomplete
when made.

                     6.3 Other Default. The occurrence of an Event of Default as
defined in the Note or any of the Security Documents.

                     6.4 If there shall occur any uninsured damage to or loss,
theft or destruction of any of the Collateral of Borrower.

                     6.5 If a default or an Event of Default shall occur under
any agreement with any creditor of Borrower, if the effect of such default is to
cause the holder of Borrower's obligation to declare such obligation (or gives
any such holder the right to declare such obligation) due prior to its maturity
date or prior to its regularly scheduled date of payment.

                     6.6 If Borrower ceases to operate its business.

                     6.7 If Borrower fails to comply with ERISA so that grounds
exist to permit the appointment of a trustee under ERISA to administer
Borrower's retirement plan(s) or to allow the Pension Benefit Guaranty
Corporation to institute proceedings to appoint a trustee to administer such
plan(s), or to permit the entry of lien to secure any deficiency or claim.

                     6.8 If at any time the outstanding principal balance of the
Line of Credit exceeds the Loan Limit or the Borrowing Base.

                     6.9 If Bank receives any indication or evidence that
Borrower or any other Obligor may have directly or indirectly been engaged in
any type of activity which, in Bank's discretion, might result in the forfeiture
of any property of Borrower to any governmental entity, federal, state or local.

Upon the occurrence of an Event of Default, the Bank will have all rights and
remedies specified in the Note and the Security Documents and all rights and
remedies (which are cumulative and not exclusive) available under applicable law
or in equity.

                  7. Conditions.  The Bank's obligation to make any advance 
under the Loan is subject to the conditions that as of the date of the advance:

                     7.1 No Event of Default. No Event of Default or event which
with the passage of time, provision of notice or both would constitute an Event
of Default shall have occurred and be continuing.


                                       -8-


<PAGE>



                     7.2 Authorization Documents. The Bank shall have been
furnished certified copies of resolutions of the board of directors or the
general partners of any partnership or corporation that executes this Agreement,
the Note or any of the Security Documents; or other proof of authorization
satisfactory to the Bank.

                     7.3 Receipt of Loan Documents. The Bank shall have received
the Loan Documents and such other instruments and documents which the Bank may
reasonably request in connection with the transactions provided for in this
Agreement, which may include an opinion of counsel for any party executing any
of the Loan Documents in form and substance satisfactory to the Bank.

                  8. Expenses. The Borrower agrees to pay the Bank, upon the
closing of this Agreement, and otherwise on demand, all costs and expenses
incurred by the Bank in connection with the (i) preparation, negotiation and
delivery of this Agreement and the other Loan Documents, and any modifications
thereto, and (ii) collecting the loan or instituting, maintaining, preserving,
enforcing and foreclosing the security interest in any of the collateral
securing the Loan, whether through judicial proceedings or otherwise, or in
defending or prosecuting any actions or proceedings arising out of or relating
to this Agreement, including reasonable fees and expenses of counsel (which may
include costs of in-house counsel), expenses for auditors, appraisers and
environmental consultants, lien searches, recording and filing fees and taxes.

                  9. Increased Costs. On written demand, together with the
written evidence of the justification therefor, the Borrower agrees to pay the
Bank, all direct costs incurred and any losses suffered or payments made by the
Bank as a consequence of making the Loan by reason of any change in law or
regulation or its interpretation imposing any reserve, deposit, allocation of
capital or similar requirement (including without limitation, Regulation D of
the Board of Governors of the Federal Reserve System) on the Bank, its holding
company or any of their respective assets.

                  10. Miscellaneous.

                     10.1 Notices. All notices, demands, requests, consents,
approvals and other communications required or permitted hereunder must be in
writing and will be effective upon receipt if delivered personally to such
party, or if sent by facsimile transmission with confirmation of delivery, or by
nationally recognized overnight courier service, to the address set forth below
or to such other address as any party may give to the other in writing for such
purpose:


                                       -9-


<PAGE>



To the Bank:

PNC Bank, National Association
100 South Broad Street
Philadelphia, PA 19110
Attention:    Denise Viola Monahan
              Vice President
Facsimile No.:  215-585-6987

To the Borrower:

Intest Corporation
12 Springdale Road
Cherry Hill,  NJ 08003
Facsimile No.:  609-751-1222

                     10.2 Preservation of Rights. No delay or omission on the
part of the Bank to exercise any right or power arising hereunder will impair
any such right or power or be considered a waiver of any such right or power or
any acquiescence therein, nor will the action or inaction of the Bank impair any
right or power arising hereunder. The Bank's rights and remedies hereunder are
cumulative and not exclusive of any other rights or remedies which the Bank may
have under other agreements, at law or in equity.

                     10.3 Illegality. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.

                     10.4 Changes in Writing. No modification, amendment or
waiver of any provision of this Agreement nor consent to any departure by the
Borrower therefrom, will in any event be effective unless the same is in writing
and signed by the Bank, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice to or
demand on the Borrower in any case will entitle the Borrower to any other or
further notice or demand in the same, similar or other circumstance.

                     10.5 Entire Agreement. This Agreement (including the
documents and instruments referred to herein) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.

                     10.6 Counterparts. This Agreement may be signed in any
number of counterpart copies and by the parties hereto on separate counterparts,
but all such copies shall constitute one and the same instrument.


                                      -10-


<PAGE>



                     10.7 Successors and Assigns. This Agreement will be binding
upon and inure to the benefit of the Borrower and the Bank and their respective
heirs, executors, administrators, successors and assigns; provided, however,
that the Borrower may not assign this Agreement in whole or in part without the
prior written consent of the Bank and the Bank at any time may assign this
Agreement in whole or in part.

                     10.8 Interpretation. In this Agreement, unless the Bank and
the Borrower otherwise agree in writing, the singular includes the plural and
the plural the singular; words importing any gender include the other genders;
references to statutes are to be construed as including all statutory provisions
consolidating, amending or replacing the statute referred to; the word "or"
shall be deemed to include "and/or", the words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections) or exhibits are
to those of this Agreement unless otherwise indicated; and references to
agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications to such instruments, but only to
the extent such amendments and other modifications are not prohibited by the
terms of this Agreement. Section headings in this Agreement are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose. Unless otherwise specified in this Agreement, all
accounting terms shall be interpreted and all accounting determinations shall be
made in accordance with GAAP. If this Agreement is executed by more than one
party as Borrower, the obligations of such persons or entities will be joint and
several.

                     10.9 Indemnity. The Borrower agrees to indemnify each of
the Bank, its directors, officers and employees and each legal entity, if any,
who controls the Bank (the "Indemnified Parties") and to hold each Indemnified
Party harmless from and against any and all claims, damages, losses, liabilities
and expenses (including, without limitation, all fees of counsel with whom any
Indemnified Party may consult and all expenses of litigation or preparation
therefor) which any Indemnified Party may incur or which may be asserted against
any Indemnified Party in connection with or arising out of the matters referred
to in this Agreement or in the other Loan Documents by any person, entity or
governmental authority (including any person or entity claiming derivatively on
behalf of the Borrower), whether (a) arising from or incurred in connection with
any breach of a representation, warranty or covenant by the Borrower, or (b)
arising out of or resulting from any suit, action, claim, proceeding or
governmental investigation, pending or threatened, whether based on statute,
regulation or order, or tort, or contract or otherwise, before any court or
governmental authority, which arises out of or relates to this Agreement, any
other Loan Document, or the use of the proceeds of the Loan; provided, however,
that the foregoing indemnity agreement shall not apply to claims, damages,
losses, liabilities and expenses solely attributable to an Indemnified Party's
gross negligence or willful misconduct. The indemnity agreement contained in
this Section shall survive the termination of this Agreement, payment of any
Loan and assignment of any rights hereunder. The Borrower may participate at its
expense in the defense of any such action or claim.


                                      -11-


<PAGE>



                     10.10 Assignments and Participations. At any time, without
any notice to the Borrower, the Bank may sell, assign, transfer, negotiate,
grant participations in, or otherwise dispose of all or any part of the Bank's
interest in the Loan. The Borrower hereby authorizes the Bank to provide,
without any notice to the Borrower, any information concerning the Borrower,
including information pertaining to the Borrower's financial condition, business
operations or general creditworthiness, to any person or entity which may
succeed to or participate in all or any part of the Bank's interest in the Loan.

                     10.11 Governing Law and Jurisdiction. This Agreement has
been delivered to and accepted by the Bank and will be deemed to be made in the
State where the Bank's office indicated above is located. THIS AGREEMENT WILL BE
INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE BANK'S OFFICE INDICATED ABOVE IS
LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. The Borrower hereby irrevocably
consents to the exclusive jurisdiction of any state or federal court for the
county or judicial district where the Bank's office indicated above is located,
and consents that all service of process be sent by nationally recognized
overnight courier service directed to the Borrower at the Borrower's address set
forth herein and service so made will be deemed to be completed on the business
day after deposit with such courier; provided that nothing contained in this
Agreement will prevent the Bank from bringing any action, enforcing any award or
judgment or exercising any rights against the Borrower individually, against any
security or against any property of the Borrower within any other county, state
or other foreign or domestic jurisdiction. The Bank and the Borrower agree that
the venue provided above is the most convenient forum for both the Bank and the
Borrower. The Borrower waives any objection to venue and any objection based on
a more convenient forum in any action instituted under this Agreement.

                     10.12 WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE
BANK IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY
DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER AND THE BANK ACKNOWLEDGE
THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

                     10.13 Amendment and Restatement. This Agreement amends and
restates in its entirety that certain Loan Agreement between the Borrower and
the Bank dated as of February 26, 1993 as amended by the First Amendment to Loan
Documents dated June 30, 1993, the Second Amendment to Loan Documents dated June
16, 1994, and the Third Amendment to Loan Documents dated May 25, 1995 ("Prior
Agreement"), and is not intended and should not be construed to discharge,
extinguish or terminate Borrower's Obligations under the Prior Agreement. The
Security Documents remain in full force and effect and continue to secure the
Obligations of Borrower, including without limitation, all Obligations of
Borrower under this Agreement, the Note and each other Loan Document.

                                      -12-


<PAGE>




The Borrower acknowledges that it has read and understood all the provisions of
this Agreement, including the waiver of jury trial, and has been advised by
counsel as necessary or appropriate.

WITNESS the due execution hereof as a document under seal, as of the date first
written above.

BORROWER:

[CORPORATE SEAL]                        INTEST CORPORATION



Attest: /s/ Hugh T. Regan               By: /s/ Hugh T. Regan, Jr.          
        -----------------------             -------------------------------- 
Print Name: Hugh T. Regan               Title: CFO
Title: Secretary/Treasurer

                                        PNC BANK, NATIONAL ASSOCIATION



                                        By: /s/ Denise Viola Monahan
                                            -----------------------------------
                                           Denise Viola Monahan, Vice President






                                      -13-


<PAGE>



ADDENDUM to that certain Amended and Restated Loan Agreement dated June ___ ,
1996, between INTEST CORPORATION, as the Borrower, and PNC BANK, NATIONAL
ASSOCIATION, as the Bank. Capitalized terms used in this Addendum and not
otherwise defined shall have the meanings given them in the Agreement. Section
numbers below refer to the sections of the Agreement.

3.6 Title to Assets. Describe additional liens and encumbrances below:








3.7 Litigation. Describe pending or threatened litigation, proceedings, etc.
below:








3.10 Environmental Matters. Describe below pending or threatened litigation or
proceedings arising under, relating to or in connection with any Environmental
Law:










                                      A - 1


<PAGE>


CONTINUATION OF ADDENDUM

                          FINANCIAL AND OTHER COVENANTS


The Borrower will maintain at all times a minimum Tangible Net Worth of not less
than $1,400,000.

The Borrower will maintain at all times a ratio of Total Liabilities to Tangible
Net Worth of less than 1.5 to 1.

The Borrower will maintain at all times a Current Ratio of not less than 
1.5 to 1.

The Borrower will maintain at all times a minimum Working Capital of not less
than $500,000.

Borrower shall deliver to Bank such other financial information as deemed
necessary in Bank's sole discretion,

"Tangible Net Worth" means stockholders' equity in the Borrower less any
advances to third parties and all items properly classified as intangibles, in
accordance with generally accepted accounting principles.

"Total Liabilities" means Total Liabilities as defined in accordance with
generally accepted accounting principles.

"Current Ratio" means net current assets divided by net current liabilities,
each computed in accordance with generally accepted accounting principals.

"Working Capital" means the excess of net current assets over net current
liabilities of Debtor, all computed in accordance with generally accepted
accounting principals, consistently applied.

                                      A - 2




<PAGE>

                                 LEASE AGREEMENT

                  THIS LEASE AGREEMENT, prepared this eleventh day of February,
1996 between CHERRY HILL INDUSTRIAL SITES, INC., a New Jersey Corporation having
its principal office at 1998 Springdale Road, Cherry Hill, New Jersey 08003,
(hereinafter referred to as LANDLORD), and INTEST, having an office at 12
Springdale Road, Building No. 11, Cherry Hill, NJ 08003 (hereinafter referred to
as TENANT).

                  Landlord and Tenant hereby covenant as follows:

                   1. LEASED PREMISES. Landlord hereby agrees to lease to
Tenant, and Tenant hereby agrees to rent from Landlord approximately 28,630
square feet, in building number 16 and land adjacent thereto, situated in Cherry
Hill Township, Block 468.04 Lot 4, as shown and defined on Exhibit A attached
hereto and made a part hereof (hereinafter referred to as the PREMISES) for the
term of: Seven (7) years (or until such prior termination as hereinafter
provided) to commence on the first day of June, 1996, and end on the thirty
first day of May, 2003, both dates inclusive. Tenant agrees that this Lease
shall, unless sooner terminated, pursuant to the terms and conditions hereof,
expire absolutely on the expiration date without the requirement of any further
notice from Landlord.

                   2. USE. Tenant
 shall use and occupy the Premises only for the
following use, which Tenant represents shall conform to the I-R zoning of Cherry
Hill Township or any subsequent zone designated for the Premises by Cherry Hill
Township: Light Manufacturing, Offices, Warehousing and Distribution.

                   3. RENT. The Term rental shall be $1,111,992.00 except as
same may be modified elsewhere in this Lease, payable by Tenant to Landlord, in
lawful money of the United States, in equal monthly rental installments of
$13,238.00 on the first day of each month, in advance, during the Term, at the
office of the Landlord or such other place as Landlord may designate.

                  Tenant shall assume the risk of lateness or failure of
delivery of the mails, and no lateness or failure of the mails will excuse
Tenant from its obligation to have made any payment of rent or additional rent
as required under this Lease.

                  No payment by Tenant or receipt or acceptance by Landlord of a
lesser amount than the correct rent or additional rent shall be deemed to be
other than a payment on account, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance or pursue any other remedy in this Lease
or at law provided.

                   4. ADDITIONAL RENT. Additional rent charges shall be paid to
Landlord within five (5) days of notice of a bill sent by Landlord to Tenant.




<PAGE>



                   5. LANDSCAPING. Tenant shall pay, as additional rent $70.00
per month for grass cutting and landscape maintenance pursuant to standards as
established by Landlord. Landlord, at its option, and at no cost to Landlord,
may utilize any exterior water sources located on the Premises for the purpose
of watering landscaping. Tenant shall ensure that water is available for use by
Landlord at exterior water sources.

                  Tenant shall keep the lawn, landscaped areas, paved surfaces,
sidewalks and similar areas free of debris and other waste material at all
times. In the event debris and/or other waste material is present upon any of
the aforementioned areas, or if, in Landlord's reasonable determination debris
and/or waste material originating from Tenant's Premises is upon other
properties owned by Landlord, Landlord may, at its option and WITHOUT PRIOR
NOTICE OR APPROVAL OF TENANT, remove same. All costs and charges relating
thereto shall be payable by Tenant as additional rent. The minimum charge for
this service shall be $50.00 per instance and/or occurrence.

                   6. SNOW REMOVAL. Tenant agrees to pay, as additional rent,
the sum of $65.00 per month for snow removal subject to the following
conditions:

                      a. Landlord's contractor shall remove snow from the paved
surfaces within the Premises within 24 hours after the cessation of any
particular snowstorm provided the average accumulation from said storm exceeds
two inches on the paved surfaces, as measured by Landlord.

                      b. In the event Landlord's contractor is unable to remove
the snow by reason of vehicles thereon, or other blockages or similar
occurrences not caused by Landlord's contractor, there shall be no further
obligation or responsibility on the part of Landlord or Landlord's contractor to
remove snow from that particular snowstorm. In such event no credit or abatement
shall be due Tenant.

                      c. Snow of less than a 2 inch average accumulation on the
paved surfaces of the Premises, as measured by Landlord, are not subject to
removal by Landlord or Landlord's contractor, but are the sole responsibility of
Tenant.

                      d. Landlord or Landlord's contractor shall have the sole
right to determine the number and location of snow storage areas.

                      e. Tenant shall look solely to Landlord's contractor for
recovery of any injury or damage to property or any person (including death)
resulting from accidents, or any other cause, ensuing from or occurring during
snow removal operations. Tenant shall not hold Landlord in any way responsible
or liable therefor and hereby releases and remises Landlord therefrom.

                      f. The responsibility of Landlord and Landlord's
contractor is restricted to the work specified herein. Work related, but not
limited, to the clearing of snow

                                       -2-


<PAGE>



from sidewalks, platforms, steps or other similar items is excluded. Any work
related to de-icing, sanding or similar items or operations, or the removal,
correction, and/or abatement of any other hazard is the sole responsibility of
Tenant.

                   7. SPRINKLER SYSTEM SERVICE. Tenant shall pay, as additional
rent, fifty-six percent (56%) of all charges relating to Building #16 for
sprinkler supervisory service and sprinkler standby fees.

                   8. UTILITIES. Tenant shall pay for all deposits, costs and
charges relating to heat, water, sewer, electricity, gas and similar services
rendered or supplied to or upon the Premises, or in connection with the use and
occupation of the Premises on or prior to the date same are due.

                  In the event there is a common water and/or sewer meter
servicing the building of which the Premises forms a part Tenant shall pay to
Landlord, as additional rent, fifty-six percent (56%) of any costs or charges
related to such service.

                  Tenant shall not be released or excused from the performance
of any of its obligations under this Lease for any failure, interruption or
curtailment of any utilities or services; nor shall any such failure,
interruption or curtailment constitute a constructive or partial eviction.

                   9. PERSONAL PROPERTY TAXES. Tenant shall pay all personal
property taxes and other taxes and assessments pertaining to its goods,
chattels, machinery, equipment, fixtures, personal property and similar items
prior to the date same are due.

                  10. REAL PROPERTY TAXES. Tenant shall pay to Landlord, as
additional rent, fifty-six percent (56%) of all real property taxes and
assessments levied upon Block 468.04, Lot 4 (Bldg #16, with adjoining land)
under or by virtue of any present or future laws or regulations of any
governmental or lawful authority having jurisdiction over the Premises.

                  If at any time during the Term any governmental or
quasi-governmental authority having jurisdiction over the Premises imposes (a) a
tax, assessment, levy, imposition, license fee or other charge on the rents
collected by Landlord, or (b) any other additional or substitute tax,
assessment, levy, imposition or charge relating to Block 468.04 Lot 4, any such
items shall be deemed to be included within the term "Real Estate Taxes" for the
purposes hereof.

                  Landlord may, at its option, contest or appeal any real
property tax or assessment affecting the Premises utilizing such attorneys
and/or experts as Landlord deems advisable. In the event of any tax reduction
Tenant shall pay to Landlord, as additional rent, either the tax savings to the
Tenant for one year or one half of the total tax savings to the Tenant during
the remainder of the Term, whichever is less.

                                       -3-


<PAGE>




                  11. INSURANCE. In respect to Landlord's fire insurance policy
with standard extended coverage and difference in condition policy, Tenant
agrees: (a) it will not do nor permit any acts or things which will invalidate
or be in conflict with any provisions thereof or which shall cause the insurance
rate on the Premises to be higher than on the date of the commencement of this
Lease; (b) it shall comply with all present and future rules, regulations and
recommendations thereof and shall promptly make all changes, modifications,
replacements and alterations as are necessary and/or required. Tenant shall not
use or occupy the Premises or do or permit anything to be done thereon in any
manner which shall prevent Landlord and/or Tenant from obtaining at standard
rates any insurance required or desired, or which would invalidate or increase
the cost to Landlord of any existing insurance, or which might cause structural
injury to any building, or which would constitute a public or private nuisance
or which would violate any present or future laws, regulations, ordinances or
requirements (ordinary or extraordinary, foreseen or unforeseen) of the federal,
state or municipal governments, or of any departments, subdivisions, bureaus or
offices thereof, or of any other governmental public or quasi-public authorities
now existing or hereafter created having jurisdiction in the Premises, or the
Industrial Center of which they form a part.

                  The aforementioned policy shall insure only the Landlord's
property against damage and/or losses for perils specified therein. In no event
will Landlord be responsible for charges and/or costs related to damage, loss,
or repair and/or replacement of any property: (a) caused by conditions,
exclusions or reasons not covered therein; (b) within the deductible provisions
of the aforementioned policies; and/or (c) any property not owned by Landlord.

                  Landlord's and Tenant's fire insurance policy with standard
extended coverage policy, difference in condition policy and rental income
insurance policy shall contain a waiver of subrogation of the rights of the
Landlord's or Tenant's insurance carrier to proceed against the Landlord or
Tenant for matters covered therein.

                  Tenant is invited and encouraged to review and ascertain the
type, deductibles and limits related to Landlord Insurance policies referenced
herein. Tenant is responsible for, and hereby saves and holds harmless Landlord,
for all costs, charges and expenses relating to or ensuing from damage, loss,
and/or replacement to/of any property, of whatever nature and from any cause
whatsoever, not covered by or within the deductible limits of Landlords
insurance policies referenced herein.

                  Tenant shall pay, as additional rent, fifty-six percent (56%)
of Landlord's premiums for fire insurance with standard extended coverage
policy, difference in condition policy and rental income insurance policy to the
extent the aforementioned policies relate to Building #16, as determined by
Landlord.

                  12. TENANT'S INSURANCE OBLIGATIONS. Tenant, as a minimum,
shall carry the following insurance policies applicable to the Premises (and
other areas as

                                       -4-


<PAGE>



may be required herein) with reputable companies authorized to issue policies in
the State of New Jersey having a Moody rating of at least A:

                      a. Comprehensive Public Liability Insurance. Such
insurance shall be for a Combined Single Limit (CSL) for bodily injury
(including death) and property damage or loss (for occurrences in or about the
Premises or arising out of Tenants ownership, maintenance, use or occupancy of
the Premises) in the amount of $1,000,000 for each occurrence, and $3,000,000 in
the aggregate.

                      b. Personal Property Insurance in amounts and types of
coverage to insure against damage or loss to any property including, but not
limited to any Tenant alterations, improvements or betterments in or about the
Premises that is not the property of Landlord caused by: (1) water, rain, sleet,
snow, or ice entering, seeping or leaking into or through the Premises or any
portion thereof; (2) fire, explosion, tornado, wind, earthquake or any other
casualty or any other similar occurrences; (3) theft, burglary, vandalism,
malicious mischief, or other similar occurrences; (4) accidents of any kind,
type or nature; (5) electrical, gas or water failure, cutoffs, surges or similar
occurrences; (6) loss or damage to property not owned by Landlord by any similar
reason.

                      c. Boiler and pressure vessel insurance (when equipment
relating to this type of insurance is located in/and or upon the Premises) with
Landlord as a named insured in sufficient amount to insure against damage or
loss to any property whether belonging to Tenant, Landlord, or others.

                      d. Such other insurance, and in such amount, as may from
time to time be reasonably required by Landlord or required by law. No insurance
requirements as set forth in this Lease shall preclude Tenant from obtaining
whatever additional insurance coverages Tenant shall deem necessary or prudent.

                      e. NOTE: Tenant shall have the right to procure its
required insurance on a blanket master policy basis and/or an umbrella basis;
provided, however, that all such coverage shall otherwise comply with all of the
requirements contained herein.

                      f. Prior to the commencement date of this Lease and by the
fifteenth day of March of each year thereafter Tenant shall deliver to the
Landlord proof that all the insurance coverages required of Tenant pursuant to
the terms and conditions of this Lease are in force and that premiums related
thereto are paid. Upon execution of this Lease, Tenant shall provide Landlord
with evidence of prepayment of the insurance premiums described herein for one
(1) year in advance.

                      g. All insurance policies required of Tenant shall: (a)
provide at least thirty (30) days prior notice to Landlord and Tenant of any
change, modifications or cancellation; and (b) contain a waiver of subrogation
of the rights of the Tenant's insurance

                                       -5-


<PAGE>



carrier to proceed against the Landlord for matters which are required to be or
are covered by the Tenant's insurance policies.

                  Upon execution of this Lease, Tenant shall provide Landlord
with evidence of prepayment of the insurance premiums described herein for one
(1) year in advance. Tenant shall give prompt notice to Landlord in case of any
fire, casualty, accident or similar occurrence.

                  13. UPGRADING. Tenant agrees to pay to Landlord, as additional
rent, during the term of this Lease the sum of $596.00 per month toward
Landlord's contribution and assistance to the Cherry Hill Industrial Center
Steering Committee (and other committees associated with the Steering Committee
that are authorized by Landlord). It is understood that Landlord has the sole
discretion as to the disbursement of funds (or non disbursement of funds if such
is the case) related to such activities as may be authorized by Landlord.

                  14. [Deleted].

                  15. FIRE. If the Premises shall be partially damaged by fire
or similar casualty as is covered under insurance policies carried by Landlord,
the damage shall be repaired by and at the expense of Landlord to the extent
provided for pursuant to the provisions thereof. Any fire or similar casualty
damage to the Premises, within the deductible limits of the aforementioned
policies shall be repaired by Landlord, but paid for by Tenant as additional
rent.

                  The rent, until such repairs are made, shall be apportioned
according to the portion of the Premises which was damaged or which has been
made unusable, whichever is less. Nevertheless the Lease shall continue in full
force and effect.

                  If the Premises are totally or substantially damaged by fire
or similar casualty, and if Landlord, at its sole option, decides not to restore
or not to rebuild same, Landlord shall then, within sixty (60) days after such
fire, give Tenant notice of such decision, and thereupon this Lease shall expire
by lapse of time upon the fifth day after such notice is given. Tenant shall
then vacate the Premises and surrender same to Landlord.

                  For the purpose of this Lease substantial damage is defined as
that which is greater than twenty (20%) percent of the insured value of the
premises as determined by the cost estimate of Landlord.

                  In the event Landlord, at its option, decides to restore or
rebuild the Premises, no penalty shall accrue for reasonable delay which may
arise by reason of adjustment of insurance on the part of Landlord and/or
Tenant, or for delays on account of labor troubles or other reasons or causes
beyond Landlord's control.


                                       -6-


<PAGE>



                  In accordance with this paragraph, Tenant explicitly waives
applicability of N.J.S.A. 46:8-6 and N.J.S.A. 46:8-7.

                  16. REPAIRS, REPLACEMENTS. Tenant shall keep the Premises in
good order and repair and shall promptly make any and all repairs, maintenance,
and replacements to the Premises of whatever nature, ordinary and extraordinary,
foreseen and unforeseen, except as is specifically provided for herein. All
repairs, maintenance and replacements shall be in quality, usefulness, and class
at least equal to the original installation.

                  Landlord shall not be required to furnish any services,
improvements, alterations, or similar items, nor to make any repairs,
maintenance, or replacements to the Premises except as is specifically provided
for herein.

                  17. ALTERATIONS. Tenant shall not make any alterations,
additions or improvements without Landlord's approval, which shall not be
unreasonably withheld or delayed.

                  In the event Tenant proposes any alterations, additions, or
improvements, it shall submit a complete set of plans and specifications
relating thereto, prepared by any architect or professional engineer registered
in the State of New Jersey to Landlord. Landlord, at its option, shall grant or
deny approval within 15 days after receipt. Landlord may impose any conditions
and/or requirements upon Tenant as Landlord considers necessary or prudent to
protect Landlord's interest in the Premises. Tenant must agree in writing to
adopt any such conditions and/or requirements before any approval is effective.

                  If Landlord shall grant approval for the proposed work and
provided Tenant has agreed to any conditions and/or requirements made a part of
such approval, the following additional conditions shall apply:

                      a. Prior to making any alterations, additions, or
improvements Tenant shall assure itself that the work will not impair the
structural integrity of the Premises, or any portion thereof. Approval of the
proposed work by Landlord shall not constitute or imply a warranty or
representation by Landlord that the existing Premises, or any part thereof, is
adequate to withstand work proposed by Tenant. By making any alterations,
additions, or improvements, Tenant expressly warrants that the same will not
impair the structural integrity of the Premises nor any part thereof and are in
full compliance with the requirements of all governmental agencies or
authorities having jurisdiction. Landlord reserves the right to approve or
reject Tenant's contractor. If Tenant's proposed alteration involves a tie-in to
building systems, Landlord further reserves the option of requiring Tenant to
use Landlord's contractor.

                      b. All costs related to the proposed work, irrespective of
their nature, are the sole responsibility of Tenant and shall be promptly paid
by Tenant at such time as they may be due.

                                       -7-


<PAGE>




                      c. All contractors, labor and/or material suppliers, and
similar parties shall agree, in writing, prior to the commencement of any work
or procurement of materials: (1) to jointly comply with Tenant with the
mechanics lien restrictions contained elsewhere in this Lease; (2) that they are
entering into any agreements for labor and/or material with Tenant and not on
behalf or for the benefit of Landlord; (3) that the work to be done shall be in
conformance with the last plans and specifications approved by Landlord and that
no changes shall be made thereto without the approval of Landlord and Tenant;
and (4) that they, and their employees and other agents, shall comply with all
rules and regulations contained in Tenant's Lease regarding their conduct on the
Premises. Proof of such agreements shall be given to Landlord prior to the
commencement of the proposed work.

                      d. Tenant shall insure, indemnify and hold Landlord
harmless for any loss to which Landlord may be subject or which Landlord may
sustain relating to accidents, injury to persons (including death), property
loss or damage of any nature whatsoever, regardless of cause, arising during or
ensuing from the work undertaken by Tenant.

                      e. All such alterations, additions and improvements upon
completion shall immediately become the property of Landlord, without
compensation by Landlord to Tenant or any other party, and simultaneously become
part of the Premises, and Tenant's obligations and responsibilities pursuant to
the terms and conditions of this Lease shall thenceforth apply to the
aforementioned alterations, additions, or improvements. Upon the termination of
Tenant's lease and/or Tenant's vacating of the premises, Tenant shall remove
said alterations, additions and improvements at Tenant's expense, if so
requested by Landlord.

                      f. Upon completion of the work, Tenant will submit to
Landlord as-built drawings and certifications of inspections certifying the
completion of the alteration, addition or improvement.

                  18. COMPLIANCE WITH LAWS. With respect to the Premises or the
use and occupation thereof Tenant shall promptly comply with all laws, orders,
regulations, and requirements now in force, or which may hereafter be in force,
of (a) Federal, State, County, and Municipal authorities and (b) private,
quasi-public and public utility companies and similar parties providing
services.

                  Tenant shall immediately notify Landlord upon receipt of
notice of a violation or alleged violation of any of the foregoing. Tenant shall
also provide Landlord, upon Landlord's request, affidavits and/or
representations executed by a knowledgeable officer or principal of the company
concerning Tenant's best knowledge and belief regarding Tenant's compliance with
particular laws, orders, regulations and requirements as may be cited by
Landlord in its request.


                                       -8-


<PAGE>



                  19. RULES AND REGULATIONS. Without limiting Tenant's
obligations pursuant to any of the terms and conditions of this Lease, Tenant
has the following duties:

                      a. Between April 15 and May 15 of each year Tenant shall
provide to Landlord, in form and content satisfactory to Landlord, a
certification from a reputable heating, ventilating and air conditioning
contractor acceptable to Landlord, or a professional engineer licensed to
practice in the State of New Jersey, confirming that all heating, ventilating
and air conditioning systems within the Premises are in good working order and
repair and are being properly serviced by Tenant.

                      b. Tenant shall keep: (1) the roof and exterior wall
systems in a watertight condition; (2) gutters, downspouts, drainage, and
sewerage systems free from obstructions and blockages; (3) all yard and exterior
wall mounted lighting on during night-time hours; (4) parking areas, driveways,
walkways, and similar items free from snow, ice, potholes and all other defects
and/or hazards; (5) the Premises in a clean, safe, and orderly condition free
from debris, refuse, trash, vermin, pests, defects and/or hazards; (6) the
dissemination of smoke, dust, odors, fumes, and other noxious gases shall be
within the limits of the industrial tolerance standards of the State Department
of Health, Bureau of Adult and Industrial Health.

                      c. Tenant shall not cause, commit or permit: (1) areas
allocated for driveways, walkways, or the parking of automobile vehicles to be
used for any other purpose; (2) any public or private nuisance; (3) use or
occupancy in a manner reasonably offensive or objectionable to the Landlord by
reason of, but not limited to, noise and/or vibrations; (4) debris, dirt, holes,
scuff marks, smears, graphics and/or similar items on wall, floor, or ceiling
surfaces; (5) any utility service or equipment to be overloaded; (6) anything
that will impair or tend to impair, in Landlord's reasonable judgement, the
character, value, or appearance of the Premises; (7) outside storage of any kind
except as is specifically provided for herein; (8) parking of inoperable
vehicles, non-motorized vehicles or trailers in or about the Premises; (9) any
part or the whole of the sidewalks, entrances, passages, stairways, corridors or
halls of the premises to be obstructed or encumbered or used for any purpose
other than ingress and egress to and from the Premises; (10) any signs,
advertisements, objects, notices or other lettering to be exhibited, inscribed,
painted, or affixed on any part of the outside or inside of the Premises, so as
to be visible from the exterior without prior approval of Landlord; (11) any
show cases or other items to be put in front of or affixed to any part of the
exterior of the building; (12) any water and wash closets and other plumbing
fixtures to be used for any purposes other than those for which they were
designed/constructed, and no sweepings, rubbish, rags or other substances shall
be thrown therein; (13) any wires to be installed except in conduits, ducts or
outlets established for that purpose, unless prior written consent of Landlord
has been obtained; (14) disturbance or interference with other Tenants or
occupants of the building or neighboring buildings; (15) canvassing, soliciting
or peddling within the Premises; (16) installation of a television, radio, or
two-way radio antenna, or any other similar antenna, on the roof, in the windows
or upon the exterior of the Premises, without the prior approval of Landlord;
(17) any

                                       -9-


<PAGE>



cooking within the Premises, without the prior written consent of Landlord,
provided, however, that the heating, refrigerating and preparing of beverages
and light snacks for employees shall be permitted if there are appropriate and
adequate facilities and equipment for such purposes; (18) unusual or
objectionable odors to be produced upon or emanate from the Premises; (19)
storage, manufacture or sale of liquor, narcotics or illegal drugs; (20) any
portion of the Premises to be used for lodging or sleeping or for any immoral or
illegal purpose; (21) animals of any kind to be brought or kept about the
Premises without Landlord's prior approval; (22) notices, posters, or
advertising media, except for purposes of emergency, to be affixed on the
exterior of the building; and (23) burning of trash or garbage of any kind in or
about the Premises.

                      d. Tenant shall: (1) store discarded material temporarily
being stored outside of the building, forming part of the Premises, within
fence-enclosed waste storage containers of a type and at locations approved by
Landlord; (2) arrange for and enforce good housekeeping procedures and practices
satisfactory to Landlord; (3) arrange for liquid wastes and effluents to be
discharged into an approved existing sewage treatment plant in accordance with
that plant's regulations and state and federal regulations, or shall treat its
own wastes and effluents in a treatment plant or process which is in compliance
with the New Jersey State and Federal Statutes and with the requirements of the
New Jersey State Department of Health; (4) shall comply with the New Jersey
State Statutes and requirements of the New Jersey State Department of Labor and
Industry Precaution against fire hazards, radiation, explosion, proper handling
and storage of materials and structural design, and safeguards for the health of
workers.

                      e. Tenant, its agents, employees, contractors, invitees,
licensees, and similar parties shall not: (1) interfere with the business of
Landlord or other Tenants or persons on any other property owned by Landlord;
(2) bring or keep within the premises any flammable, combustible or explosive
fluid, chemical or substance of types or quantities not permitted by law and/or
Landlord's fire and casualty insurance carrier.

                      f. Tenant, its agents, employees, contractors, invitees,
licensees, and similar parties shall: (1) obey speed limit, warning and related
type signs posted within the road/driveway system of the Cherry Hill Industrial
Center; (2) obey fire regulations and procedures governing the premises; (3)
keep access lids on exterior waste storage containers in a closed position
except when waste is actually being placed within said containers.

                      g. Landlord shall have the right to prohibit any
advertising by any Tenant which, in Landlord's reasonable judgment, tends to
impair the reputation of said Tenant's Premises or the Cherry Hill Industrial
Center, and upon notice from Landlord, such Tenant shall refrain from or
discontinue such advertising. Landlord shall have the right to enforce this
provision by injunction.


                                      -10-


<PAGE>



                      h. Landlord's employees shall not be required to perform,
and shall not be required by tenant to perform, any work outside of their
regular duties, unless under specific instructions from the office of Landlord.

                      i. Tenant shall immediately notify Landlord of any serious
breakage, or fire or disorder, occurring within the Premises.

                      j. Landlord reserves the right to rescind, amend, alter or
waive any of the foregoing Rules and Regulations at any time when, in its
judgment, it deems it necessary, desirable or proper for its best interest
and/or for the best interest of the tenants, and no such recession, amendment,
alteration or waiver of any rule or regulation in favor of one Tenant shall
operate as an alteration or waiver in favor of any other Tenant. Any such
rescission, amendment, alteration, or waiver shall become effective ten (10)
days after notice by Landlord to Tenant.

                      k. Nothing contained in this Lease shall be construed to
impose upon Landlord any duty or obligation to impose the rules and regulations
against any other Tenant or any employees or agents of any other Tenant, and
Landlord shall not be responsible or liable to Tenant or others for
non-observance or violation of the rules and regulations by any other Tenant or
its employees, agents, invitees or licensees at any time.

                      l. Tenant, its employees, contractors, agents, assignees,
sublessees, invitees, licensees and similar parties shall obey and observe all
reasonable rules and regulations established by Landlord from time to time for
the conduct of Tenant and/or the welfare, care, cleanliness, preservation of
good order, and/or safety of the Cherry Hill Industrial Center. Landlord shall
give Tenant at least (10) days notice of the establishment thereof. Nothing
contained in this Lease shall be construed to impose upon Landlord any duty or
obligation to enforce the rules and regulations against any other Tenant or any
employees or agents of any other Tenant, and Landlord shall not be liable to
Tenant or others for violations of the rules and regulations by any other Tenant
or its employees, contractors, agents, invitees, licensees or similar parties.

                  20. EMINENT DOMAIN. If the Premises or any portion thereof are
taken under the power of eminent domain, this Lease shall terminate as to the
part so taken as of the date the condemning authority takes title. If more than
10% of the floor area of the Premises, or more than 25% of the non floor area of
the Premises is taken by condemnation, Tenant may, at Tenant's option, to be
exercised by written notice to the Landlord within 10 days after the Landlord
shall have given Tenant notice of such taking, terminate this Lease as of the
date the condemning authority takes title. If Tenant does not terminate this
Lease in accordance with the foregoing, this Lease shall remain in full force
and effect as to the portion of the Premises remaining, except that the rent
shall be reduced in proportion to the floor area of the Premises taken to the
total floor area of the Premises. Any award for the taking of all or any part of
the Premises under the power of eminent domain or any payment made under threat
of the exercise of such power shall be the property of the Landlord,

                                      -11-


<PAGE>



whether such award shall be made as compensation for diminution in value of the
Leasehold or for the taking of the fee, or as severance damages, or other
compensation to which Landlord may be entitled. Tenant may make a separate
application for compensation relating to its trade fixtures or personal
property.

                  21. FORCE MAJEURE. Except as the effect of this paragraph may
be expressly excluded in other provisions hereof, Landlord shall be excused for
the period of any delay in the performance of any obligation hereunder when
prevented from so doing by cause or causes beyond Landlord's control which shall
include, without limitation, all labor disputes, civil commotion, war, war-like
operations, invasion, rebellion, hostilities, military or usurped power
sabotage, governmental regulations or controls, fire or other casualty,
inability to obtain any material, services or financing or through Acts of God.

                  22. LANDLORD'S NON-LIABILITY. Except as is specifically
provided for herein:

                  Landlord shall not be liable or responsible for any loss or
damage to any property regardless of its nature or ownership at any time on or
about the Premises arising from any cause or reason whatsoever. Nor shall
Landlord be liable or responsible for any harm or injury (including death) to
any person at any time on or about the Premises, arising from any cause or
reason whatsoever. Tenant shall not hold Landlord in any way responsible or
liable therefor and hereby releases and remises Landlord therefrom.

                  Without limiting or diminishing Landlord's non-liability as
provided for herein, Landlord shall not be responsible or liable to Tenant, its
employees, invitees, agents, or any other party for any loss or damage to any
property or harm or injury to any persons (including death): (a) which is and/or
should have been covered by an insurance policy required of Tenant or which
Tenant failed to obtain or keep in force and effect; (b) caused by work
stoppages, business interruptions, or similar events; (c) caused by other
Tenants, its agents, invitees, employees, and similar parties; (d) caused by
operations in construction of any private, public or quasi-public works; (e)
caused by any latent or patent defects in the Premises or in any part of the
building of which the Premises may form a part; (f) arising out of the design or
construction of the Premises; (g) caused by snow, wind, rain, leakage, and
similar events into or out of any portion of the Premises; (h) caused by
leakage, overflows, obstructions, blockages, explosions, collapse, bursts,
surges, and similar events of any mechanical, structural or other component
and/or part thereof; (i) arising from or caused by Tenant's business operation,
occupancy and/or use of the Premises and/or the streets, rights of way, and
walkways adjacent thereto, or any other similar reason.

                  All non-liability, waivers of liability, and save and hold
harmless references in this Lease given Cherry Hill Industrial Sites, Inc., as
Landlord, shall apply to: (a) Cherry Hill Industrial Sites, Inc., as General
Contractor, Designer, Contractor, or Subcontractor; and (b) any partner, joint
venturer, director, officer, agent, stockholder, and employee of Cherry Hill
Industrial Sites, Inc.

                                      -12-


<PAGE>




                  23. INDEMNIFICATION. Tenant shall not do, nor permit to be
done, any act or thing in or upon the Premises, which may, will, or does subject
Landlord to any claims, penalties, expenses, judgments, responsibility,
liability, damages or similar occurrence by reason of damage or loss to any
property or harm and/or injury (including death) to any persons at any time.

                  Tenant agrees to and shall hold and save harmless and
indemnify the Landlord from and for any and all payments, expenses, costs,
attorney fees, claims and liability for losses or damage to property and/or
injury to any person (including death) resulting from any acts or omissions by
the Tenant, or its agents, employees, guests, licensees, invitees, sub-tenants,
contractors and similar parties, or for any cause or reason arising out of or by
reason of Tenant's use and/or occupancy of the Premises and/or the conduct of
Tenant's business and/or the breach by Tenant of any of the terms and conditions
of this Lease and/or similar reason.

                  24. FAILURE TO GIVE POSSESSION. If Landlord, for any reason,
shall be unable to give possession of the Premises on the date set for the
commencement of the Term, Landlord shall not be subject to any liability for
such failure. Under such circumstances, provided the delay is not caused or
contributed to by Tenant, the rent payments shall not commence until possession
of the Premises is given or the Premises are available for occupancy by Tenant,
whichever occurs first. Failure to give possession on the date of commencement
of the term shall in no way affect the validity of this Lease or the obligations
of Tenant hereunder nor shall it be construed in any way as an extension to the
Term or expiration date of this Lease.

                  If Landlord, at its option, grants Tenant permission to enter
into the possession of the Premises prior to the date specified as the
commencement of the Term, Tenant agrees that such occupancy shall be pursuant to
the terms and conditions of this Lease.

                  25. MECHANICS LIEN. Tenant shall not permit nor allow any
notice of intention to file a mechanic's lien to be filed against the Premises.
However, in the event any notice of intention to file a mechanic's lien is filed
for work to be performed or material to be furnished, or a mechanic's lien is
filed for work claimed to have been done or for materials claimed to have been
furnished to Tenant, same shall be discharged of record and satisfied by Tenant
within five (5) days thereafter at Tenant's own cost and expense, or Tenant
shall file a bond pursuant to statute releasing such liens. Failure to do so
shall entitle Landlord to resort to such remedies as are provided herein in case
of any default of this Lease, in addition to such as are permitted by law.

                  26. ACCESS TO PREMISES. Landlord, its employees and agents
shall have the right to enter the Premises at all reasonable times for the
purpose of: (a) examining or inspecting the same; (b) showing the same to
prospective purchasers, mortgagees or Tenants; (c) making such alterations,
repairs, improvements or additions to the Premises or to the Building as may be
necessary; (d) any other similar or reasonable purpose.

                                      -13-


<PAGE>




                  If representatives of Tenant shall not be present to open and
permit entry into the Premises at an time when such entry by Landlord is
necessary or permitted hereunder, Landlord may enter by means of a master key
(or forcibly in the event of an emergency) without: (a) liability to Landlord,
its employees, agents, invitees and similar parties; (b) hinderance or
molestation from Tenant, its employees, and agents; and (c) such entry
constituting an eviction of Tenant or termination of this Lease.

                  27. ASSIGNMENT.

                      a. Tenant shall not assign, mortgage, pledge, encumber or
in any manner transfer this Lease or any portion thereof, or any interest
herein, or sublet the whole or any part of the Premises, without obtaining the
approval of Landlord. In the event of any such occurrence, with or without
Landlord's approval, Tenant shall, nevertheless, remain liable for the
performance of all of the terms and conditions of this Lease and will require
any assignee/sublessee to execute and deliver to Landlord an assumption of all
of the terms and conditions of this Lease in form satisfactory to Landlord.
Landlord shall be entitled to, and Tenant shall promptly remit to Landlord, any
profit which may inure to the benefit of Tenant as a result of any partial or
entire subletting of the Premises or assignment of this Lease, whether or not
approved by Landlord.

                      b. For the purposes of this paragraph, Tenant understands
that the transfer of a majority of Tenant's stock is tantamount to an
assignment.

                      c. As a condition precedent to Tenant's right to sublease
the Premises or to assign this Lease, Tenant shall, at Tenant's own expense,
first comply with ECRA and fulfill all of Tenant's environmental obligations
under this Lease pursuant to paragraph 51 which also arise upon termination of
Tenant's lease term. If this condition is not satisfied, then Landlord shall
have the right to withhold consent to sublease or assignment.

                  Tenant shall promptly furnish to Landlord true and complete
copies of all documents, submissions and correspondence provided by Tenant to
the Element and all documents, reports, directives and correspondence provided
by the Element to Tenant. Tenant shall also promptly furnish to Landlord true
and complete copies of all sampling and test results obtained from samples and
tests taken at and around the Premises. Tenant shall notify Landlord in advance
of all meetings scheduled between Tenant and NJDEP, and Landlord may attend all
such meetings.

                      d. Should Tenant make an assignment or sublet the Premises
or any portion thereof without the approval of Landlord, then Landlord may, at
its option, terminate this Lease by giving Tenant five (5) days notice of
Landlord's intention to do so and, upon the expiration of five (5) days, this
Lease shall terminate and Tenant shall peaceably quit and surrender the Premises
to Landlord; nevertheless Tenant shall remain liable as provided

                                      -14-


<PAGE>



elsewhere in this Lease. This Lease shall not, nor shall any interest therein,
be assignable as to the interest of Tenant by operation of law, without the
approval of Landlord.

                      e. Subletting or assigning this Lease to anyone other than
an actual user of the Premises is positively prohibited.

                      f. Tenant may assign this Lease or sublet the Premises or
any part thereof to a subsidiary or controlled or affiliated concern of Tenant
and of its parent, or a surviving company of a merger or consolidation of any of
the foregoing without the Landlord's consent. Tenant is expressly granted
consent to assign or sublet the Premises, or any portion thereof, to a wholly
owned subsidiary.

                  28. SUBORDINATION. This Lease shall be subject and subordinate
at all times to the lien of any mortgages and/or other encumbrances, common
right-of-way's, easements and similar items existing or hereafter placed upon
the Premises by Landlord, or with the permission of Landlord, without the
necessity of any further instrument or act on the part of Tenant to effectuate
such subordination. Tenant agrees, however, at the election of a mortgagee, to
attorn to any holder of any mortgage to which this Lease is subordinate. Tenant
agrees to execute and deliver promptly upon demand, and without charge, such
further instrument or instruments evidencing such subordination of this Lease to
the lien of any mortgage and/or other encumbrance. Tenant hereby irrevocably
appoints Landlord as Tenant's attorney-in-fact to execute and deliver such
instrument or instruments for and in the name of the Tenant provided same have
not been executed by Tenant within ten (10) days after Landlord's notice to
Tenant.

                  Landlord agrees that the subordination of the Lease to any
future mortgage relating to the Premises shall be conditional and contingent
upon any such mortgagee's agreeing that, so long as Tenant is not in default
under the terms and conditions of the Lease, such mortgages shall not disturb
Tenant's use, possession and occupancy of the Premises.

                  29. CERTIFICATIONS. Tenant agrees, within ten (10) days after
Landlord's notice, to execute, acknowledge and deliver to Landlord a written
instrument in recordable form certifying: (1) that this Lease is unmodified and
in full force and effect (or if there have been modifications, that the same are
in full force and effect as modified and stating the modifications); (2) that
the Tenant has accepted possession of the Premises and the date on which the
term of the Lease commenced; (3) the dates to which rent and additional rent
have been paid in advance, if any; (4) whether or not to the best knowledge of
the signer of such certificate, Landlord is in default in the performance of any
covenant of this Lease, and, if so, specifying each such default of which the
signers may have knowledge; (5) any other reasonable stipulation as may be
required and/or requested by Landlord. It is understood that such instrument may
be relied upon by a prospective purchaser of the fee or any mortgagee of the
Premises.


                                      -15-


<PAGE>



                  Tenant shall provide to Landlord, if requested, its latest
audited financial statement, accurately reflecting its financial condition for
the latest fiscal year of Tenant. It is understood that such statement may be
relied upon by a prospective purchaser of the fee or any mortgagee of the
Premises.

                  30. DEFAULT. The occurrence of any of the following shall
constitute a material default and breach of this Lease by Tenant:

                      a. Failure of Tenant to accept possession of the Premises
within thirty (30) days after the effective date of the Lease;

                      b. The vacating or abandonment of the Premises by Tenant;

                      c. The failure by Tenant to pay, when due, any installment
of rent hereunder or any additional rent or any such other sum herein required
to be paid by Tenant;

                      d. A failure by Tenant to observe and perform any other
provision or terms and conditions of this Lease to be observed or performed by
Tenant, where such failure continues for fifteen (15) days (or a lesser time
period when an emergency or law requires or makes such a reduction for abatement
and/or correction prudent; or when a lessor or non-notice provision is
specifically provided for in any covenant of this Lease) after written notice
thereof from Landlord to Tenant provided, however, that if the nature of the
default is such that the same cannot reasonably be cured within such fifteen
(15) day period, Tenant shall not be deemed to be in default if Tenant shall
within such period commence such cure and thereafter diligently prosecute the
same to completion;

                      e. The filing of a petition by or against Tenant for
adjudication as a bankrupt or insolvent or for its reorganization or for the
appointment pursuant to any local, state or Federal bankruptcy or insolvency law
of a receiver or trustee of Tenant's property; or an assignment by Tenant for
the benefit of creditors; or the taking of possession of the property of Tenant
by any local, state or Federal governmental officer or agency or court appointed
official for the dissolution or liquidation of Tenant or for the operating,
either temporary or permanent, of Tenant's business; provided, however, that if
any such action is commenced against Tenant, the same shall not constitute a
default if Tenant causes the same to be dismissed within thirty (30) days after
the filing of same.

                                    REMEDIES

                  Upon the occurrence of any such event of default set forth
above:

                      a. Landlord may (but shall not be required to) perform for
the account of Tenant the curing of any default of Tenant and immediately
recover as additional rent any expenditure made and the amount of any
obligations incurred in connection

                                      -16-


<PAGE>



therewith, plus interest at the rate of four percent (4%) per annum over the
Midlantic National Bank/South prime rate from the date of such expenditure;

                      b. Tenant may cure any monetary default by making payment
of the monies due, together with a late charge of 5% of the amount due not later
than ten (10) calendar days after notice of the default has been given to
Tenant. If said default should continue for a longer period, Landlord may
accelerate all rent and additional rent due for the succeeding nine (9) months
of the term of this Lease and declare the same to be immediately due and
payable.

                      c. Tenant may cure any non-monetary default by correcting
the default condition described in Landlord's notice to Tenant if said
corrections are completed within twenty (20) calendar days after notice of the
default has been given to Tenant. If said default should continue for a longer
period, Landlord may accelerate all rent and additional rent due for the
succeeding nine (9) months of the term of this Lease and declare the same to be
immediately due and payable.

                      d. In the event of default, and the failure of Tenant to
cure same within the designated time period, Landlord, at its option, may serve
notice upon Tenant that this Lease and the then unexpired term hereof and all
renewal options shall cease and expire and become absolutely void on the date
specified in such notice, to be not less than five (5) days after the date of
such notice without any right on the part of the Tenant to save the forfeiture
by payment of any sum due or by the performance of any terms, provision,
covenant, agreement or condition broken; and, thereupon and at the expiration of
the time limit in such notice, this Lease and the term hereof granted, as well
as the right, title and interest of the Tenant hereunder, shall wholly cease and
expire and become void in the same manner and with the same force and effect
(except as to Tenant's liability) as if the date fixed in such notice were the
date herein granted for expiration of the term of this Lease. Thereupon, Tenant
shall immediately quit and surrender to Landlord the Premises, and Landlord may
enter into and repossess the Premises by summary proceedings, detainer,
ejectment or otherwise and remove all occupants thereof and, at Landlord's
option, any property thereon without being liable to indictment, prosecution or
damages therefor. No such expiration or termination of this Lease shall relieve
Tenant of its liability and obligations under this Lease, whether or the
Premises shall be relet;

                      e. Landlord may, at any time after the occurrence of any
event of default, re-enter and repossess the Premises and any part thereof and
attempt in its own name, as agent for Tenant if this Lease not be terminated or
in its own behalf if this Lease be terminated, to relet all or any part of such
Premises for and upon such terms and to such persons, firms or corporations and
for such period or periods as Landlord, in its sole discretion, shall determine,
including the term beyond the termination of this Lease; and Landlord shall not
be required to accept any tenant offered by Tenant or observe any instruction
given by Tenant about such reletting or do any act or exercise any care or
diligence with respect to such reletting or to the mitigation of damages. For
the purpose of

                                      -17-


<PAGE>



such reletting, Landlord may decorate or make repairs, changes, alterations or
additions in or to the Premises to the extent deemed by Landlord desirable or
convenient; and the cost of such decoration, repairs, changes, alterations or
additions shall be charged to and be payable by Tenant as additional rent
hereunder, as well as any reasonable brokerage and legal fees expended by
Landlord; and any sums collected by Landlord from any new tenant obtained on
account of the Tenant shall be credited against the balance of the rent due
hereunder as aforesaid. Tenant shall pay to Landlord monthly, on the days when
the rent would have been payable under this Lease, the amount due hereunder less
the amount obtained by Landlord from such new Tenant;

                      f. The parties recognize and agree that the damage to
Landlord resulting from any failure by Tenant to timely surrender possession of
the Premises will be substantial, will exceed the amount of the monthly
installments of the Rent payable hereunder, and will be impossible to measure
accurately. Tenant therefore agrees that if possession of the Premises is not
surrendered to Landlord upon the expiration date or sooner termination of the
Lease, in addition to any other rights or remedies Landlord may have hereunder
or at law, Tenant shall pay to Landlord, as liquidated damages, for each month
and for each portion of any month during which Tenant holds over in the Premises
after the expiration date or sooner termination of this Lease, a sum equal to
two times the aggregate of that portion of Base Annual Rent and Additional Rent
that was payable under this Lease during the last month of the Term.

                  Nothing herein contained shall be deemed to permit Tenant to
retain possession of the Premises after the expiration date or sooner
termination of the Lease.

                      g. In addition to all remedies provided herein or by law,
Tenant shall pay to Landlord reasonable attorneys fees and court costs and any
other expenses incurred as a result of such breach or default.

                  31. EXPIRATION. Upon the expiration date of this Lease or
prior termination specified by Landlord pursuant to notice as provided for
elsewhere in this Lease: (a) Tenant shall remove all of its personal property
from the Premises; (b) Tenant shall peacefully quit and surrender to Landlord
the Premises, broom clean and in the same condition in which Tenant has agreed
to keep it during the Term. Tenant's obligation to observe or perform this
covenant shall survive the expiration or prior termination date of this Lease;
(c) Tenant, for itself and on behalf of any and all persons claiming through or
under it, including, but not limited to, creditors of every kind, shall and does
hereby waive and surrender all rights and privileges which it may have under or
by reason of any present or future law, to redeem the Premises or to have a
continuance of this Lease; (d) Landlord may enter and repossess the Premises as
of Landlord's former estate and expel Tenant, and those claiming through or
under Tenant from the Premises; (e) Landlord may remove from the Premises any
property of Tenant and/or the property of those claiming through or under Tenant
and, without notice to Tenant or others, sell such property or any part thereof
at public or private sale or Landlord may treat such property or any part
thereof as abandoned

                                      -18-


<PAGE>



and dispose of same in any manner as Landlord, at its option, elects, all at the
risk and cost of Tenant and without any liability to Landlord whatsoever.

                  If during the last month of the term or prior termination,
Tenant has removed all or substantially all of the Tenant's property from the
Premises, Landlord may, without notice to Tenant, immediately enter the Premises
to renovate and decorate the Premises, without liability to Tenant and without
reducing or otherwise affecting Tenant's obligations hereunder.

                  32. NON-WAIVER BY LANDLORD. Landlord may restrain any breach
or threatened breach of any covenant of this Lease by Tenant. However, the
recitation herein of any particular remedy shall not preclude the Landlord from
any other remedy it may have, either at law or in equity. Landlord, at its
option, may pursue more than one remedy available either concurrently or
separately. The failure of Landlord to insist upon the strict performance of any
one of the terms and conditions of this Lease or to exercise any right, remedy
or election provided for in this Lease, or permitted by law, shall not
constitute or be construed as a waiver or relinquishment of such right, remedy
or election. Landlord may, at its option, mitigate any damages caused or arising
out Tenant's breach of any of the terms and conditions of this Lease, but shall
not be under any obligation or duty to do so. Any rights and remedies of
Landlord, whether created by the terms of this Lease or existing at law, in
equity, or otherwise, shall be distinct, separate and cumulative and no one of
them, whether exercised by Landlord or not, shall be deemed to be in exclusion
of any other.

                  No covenant of this Lease shall be deemed to have been waived
by Landlord unless such waiver is in writing, signed by Landlord.

                  33. QUIET ENJOYMENT. Landlord covenants that upon Tenant
observing and performing all the terms and conditions of this Lease, Tenant
shall and may peaceably and quietly have, hold and enjoy the Premises for the
term aforementioned.

                  34. SECURITY. Tenant has deposited with Landlord the sum of
$5,234.00 (carried over) as security for the faithful performance and observance
by Tenant of the terms and conditions of this Lease. The depositing of said sum
with the Landlord is a condition precedent to the valid execution of the Lease.
Landlord, at its option, may use, apply or retain the whole or any part of the
security so deposited for the payment of any sum for which Tenant is in default
or for any sum which Landlord, at its option, may expend by reason of Tenant's
default of any of the terms and conditions of this Lease. Any expenditures made
by Landlord as herein stipulated shall be paid by Tenant as additional rent.
Landlord shall be permitted to co-mingle Tenant security funds with other funds
of Landlord and shall not be required to pay interest on any sum so held.

                  In the event that Tenant shall fully and faithfully comply
with all the terms and conditions of this Lease, the security shall be returned
to Tenant after the date fixed as the

                                      -19-


<PAGE>



end of the Lease and after delivery of the Premises by Tenant to Landlord
pursuant to the terms and conditions of this Lease.

                  In the event of a sale of the Premises, Landlord shall have
the right to transfer the security to the buyer and Landlord shall thereupon be
relieved by Tenant from all liability for the return of such security and Tenant
agrees to look to the buyer solely for the return of said security. The
provisions hereof shall apply to every transfer or assignment made of the
security to a new buyer. Tenant further covenants that it will not assign or
encumber or attempt to assign or encumber the monies deposited herein as
security and that neither the Landlord nor its successors or assigns shall be
bound by any such assignment, encumbrance, attempted assignment or attempted
encumbrance.

                  35. BILLS/NOTICES. Except as otherwise provided in this Lease,
any bill, statement, or notice shall be deemed sufficient if written and
delivered to Tenant personally or sent by certified mail, return receipt
requested, to Tenant at the Premises. The time of mailing of such bill or
statement and of the giving of such notice or communication shall be deemed to
be the time when same is mailed to Tenant as herein provided. Any notice by
Tenant to Landlord must be served by certified mail, return receipt requested,
to Landlord at the address herein given or at such other address as Landlord
shall designate.

                  36. WAIVER OF TRIAL BY JURY. Landlord and Tenant agree that
the respective parties shall and hereby do waive trial by jury in any action or
proceeding brought by either of the parties hereto against the other on any
matters arising out this Lease.

                  In any action brought by the Landlord against the Tenant,
Tenant shall not interpose any counterclaim against Landlord, but same shall be
subject to an independent action which is not to be consolidated with the
Landlord's action.

                  This Lease shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Lease to be drafted.

                  If Landlord institutes a dispossess or eviction action in
response to Tenant's refusal to vacate the Premises, Tenant waives its right to
invoke N.J.S.A. 2A:18-60. In any action brought by the Landlord against the
Tenant, Tenant shall not interpose any counterclaim against Landlord, but same
shall be subject to an independent action which is not to be consolidated with
the Landlord's action.

                  37. SIGNS. The Tenant shall not place nor allow to be placed
any signs upon or about the exterior of the building or the grounds of the
Premises, or other property of Landlord unless of a design and structure and at
such locations as shall be first approved by the Landlord and then the
appropriate governmental authorities and/or agencies, if required.


                                      -20-


<PAGE>



                  Tenant, shall pay, as additional rent, all costs and charges
incurred by Landlord related to the installation, repair, maintenance, or
replacement of all signs related to the Tenant within the Cherry Hill Industrial
Center.

                  38. BROKER. Tenant represents to Landlord that it has not
dealt with any broker or similar service in connection with this Lease. Tenant
shall hold and keep Landlord harmless from and against any claim for brokerage
commissions and all liabilities and expenses arising therefrom.

                  39. NO REPRESENTATIONS. (a) Tenant has rented the Premises
after a complete inspection and examination of its present condition and without
any representation on the part of the Landlord, its agents, employees, and
similar parties as to the condition or usefulness of the Premises; (b) Tenant
does not acquire any rights, easements or licenses by implication or otherwise,
except as are specifically provided for herein; (c) Tenant's possession of the
Premises shall be conclusive evidence that the Premises were in good and
satisfactory condition at the time Tenant took possession and that Tenant
accepted same "as is" and in its present condition without any express or
implied warranties; (d) upon execution of this Lease or anytime thereafter
Tenant assumes the full and sole responsibility for the condition, safety,
operation and management of the Premises pursuant to the terms and conditions
contained herein.

                  40. LANDLORD'S APPROVAL. Except where specifically stated
otherwise:

                  Whenever Landlord's approval or consent is required pursuant
to any term or condition of this Lease, such approval shall be in writing and in
advance for each occurrence. Landlord is under no duty or obligation to grant
approvals.

                  Whenever this Lease provides for a Landlord's option, it is
agreed such does not imply or constitute a duty or an obligation of Landlord.

                  Whenever this Lease provides for Landlord's approval which
shall not be unreasonably withheld, it is agreed that Tenant's remedy in the
event of Landlord's non-approval is limited to specific performance.

                  41. NET LEASE. It is intended that the rent and additional
rent reserved hereunder shall be an absolutely net return to the Landlord
throughout the Term. The rent and additional rent reserved hereunder shall be
paid to the Landlord without any claim on the part of Tenant, or those claiming
under Tenant, for diminution, setoff, deduction, or abatement except as is
specifically provided for herein.

                  Tenant's obligation to pay rent and additional rent hereunder,
and to perform the terms and conditions of this Lease shall in no way be
affected, impaired or excused because Landlord is unable to fulfill any of its
obligations hereunder, or because Tenant's use

                                      -21-


<PAGE>



and occupancy of the Premises is disturbed for any reason other than as is
specifically provided for herein.

                  42. LANDLORD'S BREACH. Tenant shall look solely to a sum that
shall not exceed five percent (5%) of the net annual rental for the satisfaction
of the remedies of Tenant in the event of a breach by Landlord of any of the
covenant(s) of this Lease.

                  43. TENANTS WARRANTY. Tenant warrants that if it is a
corporation that: (a) it is duly incorporated and/or qualified under the laws of
the State of New Jersey and is authorized to do business in the State of New
Jersey and is in good standing; (b) all necessary corporate action necessary to
authorize the execution of this Lease upon the terms and conditions set forth
herein have been duly taken; and (c) the officer(s) executing and delivering
this Lease have been duly authorized to bind the corporation to the terms and
conditions herein contained.

                  44. ADVERSE POSSESSION. Tenant shall not suffer or permit the
Premises, or any portion thereof, to be used without restriction or in such a
manner as might reasonably tend to impair Landlord's title to the Premises or in
such manner as might reasonably make possible claims of adverse usage or adverse
possession, or of implied dedication of the Premises or any portion thereof.

                  45. COMPLIANCE WITH THE NJ ENVIRONMENTAL CLEANUP
RESPONSIBILITY ACT.

                      a. Tenant shall, at Tenant's own expense, comply with the
Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K-6 et seq., the
regulations promulgated thereunder and any successor legislation and
regulations, and any amendments or additions thereto, (hereinafter referred to
as "ECRA"). Tenant shall, at Tenant's own expense, make all submissions to,
provide all information to, and comply with all requirements of, the Industrial
Site Evaluation or its successor ("Element") of the New Jersey Department of
Environmental Protection ("NJDEP").

                      b. Tenant's obligations under this paragraph shall arise
if there is any closing, terminating or transferring of operations of an
industrial establishment at the premises pursuant to ECRA, whether triggered by
Landlord or Tenant.

                      c. Provided this Lease is not previously cancelled or
terminated by either party or by operation of law, Tenant shall commence its
submission to the Element in anticipation of the end of the lease term no later
than one (1) year prior to the expiration of the lease term. Tenant shall
promptly furnish to Landlord true and complete copies of all documents,
submissions, correspondence and oral or written communications provided by
Tenant to the Element, and all documents, reports, directives, correspondence
and oral or written communications by the Element to Tenant. Tenant shall also
promptly furnish to Landlord true and complete copies of all sampling and test
results and reports obtained and

                                      -22-


<PAGE>



prepared from samples and tests taken at and around the Premises. Tenant shall
notify Landlord in advance of all meetings scheduled between Tenant and NJDEP,
and Landlord may attend all such meetings.

                      d. Should the Element or any other division of NJDEP
determine that a cleanup plan be prepared and that a cleanup be undertaken
because of a spill or discharge of a hazardous substance or waste at the
Premises which occurred during the term of the Lease, Tenant shall, at Tenant's
own expense, promptly prepare and submit the required plan and financial
assurances and shall promptly carry out the approved plans.

                      e. At no expense to Landlord, Tenant shall promptly
provide all information requested by Landlord or NJDEP for preparation of a
non-applicability affidavit, de minimus quantity exemption application, negative
declaration application, limited conveyance application or other submission and
shall promptly sign such affidavits and submissions when requested by Landlord
or NJDEP.

                      f. Should Tenant's operations at the Premises be outside
of those industrial operations covered by ECRA, Tenant shall, at Tenant's own
expense, obtain a letter of non-applicability or de minimus quantity exemption
from the Element prior to termination of the Lease term and shall promptly
provide Tenant's submission and the Element's exemption letter to Landlord.
Should Tenant obtain a letter of non-applicability or de minimus quantity
exemption from the Element, then Tenant shall, at Landlord's option, hire a
consultant satisfactory to Landlord to undertake sampling at the Premises
sufficient to determine whether or not Tenant's operations have resulted in a
spill or discharge of a hazardous substance or waste at/or around the Premises.
Should the sampling reveal any spill or discharge of a hazardous substance or
waste, then Tenant shall, at Tenant's expense, promptly clean up the Premises to
the satisfaction of Landlord and NJDEP.

                      g. If Tenant fails to obtain either: (i) a
non-applicability letter; (ii) a de minimus exemption; (iii) a negative
declaration; or (iv) final approval of cleanup; (collectively referred to as
"ECRA clearance") from the Element; or fails to clean up the Premises pursuant
to subparagraph (f) above, prior to the expiration or earlier termination of the
lease term, then upon the expiration or earlier termination of the lease term
Landlord shall have the option either to consider the Lease as having ended or
to treat Tenant as a holdover tenant in possession of the Premises. If Landlord
considers the Lease as having ended, then Tenant shall nevertheless be obligated
to promptly obtain ECRA clearance and to fulfill the obligations set forth in
subparagraph (f) above. If Landlord treats Tenant as a holdover tenant in
possession of the Premises, then Tenant shall monthly pay to Landlord double the
regular and additional monthly rent which Tenant would otherwise have paid,
until such time as Tenant obtains ECRA clearance and fulfills its obligations
under subparagraph (f) above, and during the holdover period all of the terms of
this Lease shall remain in full force and effect.


                                      -23-


<PAGE>



                      h. Tenant represents and warrants to Landlord that Tenant
intends to use the Premises for light manufacturing, offices, warehousing and
distribution which operations have the following Standard Industrial
Classification ("SIC") numbers as defined by the most recent edition of the
Standard Industrial Classification Manual published by the Federal Executive
Office of the President, Office of Management and Budget: 3999. Tenant's use of
the Premises shall be restricted to the classifications set forth above unless
Tenant obtains Landlord's written prior written consent to any change in use of
the Premises. Prior to the commencement date of Tenant's lease term, Tenant
shall supply to Landlord an affidavit of an officer of Tenant ("Officer's
Affidavit") setting forth Tenant's SIC numbers and a detailed description of the
operations and processes Tenant will undertake at the Premises, organized in the
form of a narrative report including a description and quantification of
hazardous substances and wastes to be generated, manufactured, refined,
transported, treated, stored, handled or disposed of at the Premises. Following
commencement of the lease term, Tenant shall notify Landlord by way of a
supplemental Officer's Affidavit, as to any changes in Tenant's operation, SIC
number or use or generation of hazardous substances and wastes. Tenant shall
also supplement and update Officer's Affidavit upon each anniversary of the
commencement of the lease term. Tenant shall not commence or alter any
operations at the Premises prior to (i) obtaining all required operating and
discharge permits or approvals, including, but not limited to, air pollution
control permits and pollution discharge elimination system permits from NJDEP,
all governmental or public authorities having jurisdiction over Tenant's
operations or the Premises, and (ii) providing copies of permits and approvals
to Landlord.

                      i. Tenant shall permit Landlord and Landlord's agents,
servants and employees, including, but not limited to, legal counsel and
environmental consultants and engineers, access to the Premises for the purposes
of environmental inspections and sampling during regular business hours, or
during other hours either by agreement of the parties or in the event of any
environmental emergency. Tenant shall not restrict access to any part of the
Premises, and Tenant shall not impose any conditions to access. In the event
that Landlord's environmental inspection shall include sampling and testing of
the Premises, Landlord shall use its best efforts to avoid interfering with
Tenant's use of the Premises, and upon completion of sampling and testing shall
repair and restore the affected areas of the Premises from any damage caused by
the sampling and testing.

                      j. Tenant's indemnification of Landlord as set forth
elsewhere within this Lease shall extend to any and all claims, liabilities,
losses, damages and costs, foreseen or unforeseen, including without limitation
counsel, engineering and other professional or expert fees, which Landlord may
incur by reason of Tenant's action or non-action with regard to Tenant's
obligations under this paragraph.

                      k. This paragraph shall survive the expiration or earlier
termination of this Lease. Tenant's failure to abide by the terms of this
paragraph shall be restrainable by injunction without limiting Landlord's right
to remedy as provided for elsewhere in this Lease.

                                      -24-


<PAGE>




                  46. HAZARDOUS MATERIALS. Tenant shall not bring, allow, use,
dispose, or permit upon the Premises or generate, create, emit, or dispose at or
upon the Premises any toxic or hazardous substances, materials or wastes as
those substances, materials or wastes are defined by any applicable state or
federal statutes and/or regulations or any applicable municipal or county
ordinances, and any amendments or additions thereto, without being in full
compliance with said statutes, regulations or ordinances. Tenant shall obtain
and maintain all applicable state, federal, municipal and county permits
relating to Tenant's processes or operations or the generation, storage or
disposal of hazardous substances, materials or wastes on the Premises. Tenant
shall not allow the disposal of hazardous substances, materials, or wastes on
the Premises.

                  Tenant acknowledges that during the term of this Lease,
chemical(s) or material(s) which Tenant uses, generates, repackages, stores or
permits on the Premises may be legally banned or subject to mandatory
modification or conversion. Tenant agrees that it will not, on the basis of such
legal ban or mandatory modification or conversion, claim frustration of purpose,
seek termination of the Lease, or seek abatement of rent. Tenant further agrees
that it will comply fully, and at Tenant's own expense, with any said legal ban
or mandatory modification or conversion.

                  47. ENVIRONMENTAL REPORTS. Tenant shall promptly provide
Landlord with:

                      a. all documentation and correspondence provided to NJDEP
pursuant to the Worker and Community Right to Know Act, N.J.S.A. 34:5A-1, et
seq. and the regulations promulgated thereunder ("Right to Know Act"), and any
amendments or additions thereto,

                      b. all reports and notices made by Tenant pursuant to the
Hazardous Substance Discharge--Reports and Notices Act, N.J.S.A. 13:1K-15 et
seq., and the regulations promulgated thereunder ("Reports and Notices Act"),
and any amendments or additions thereto, and

                      c. any notices, correspondence and submissions made by
Tenant to NJDEP, the United States Environmental Protection Agency (EPA), the
United States Occupational, Safety and Health Administration (OSHA), or any
other local, state or federal authority which requires submission of any
information concerning environmental matters or hazardous waste or substances.

                  48. ENVIRONMENTAL LIENS. Tenant shall promptly notify Landlord
as to any liens threatened or attached against the Premises pursuant to the
Spill Act or any other environmental law. In the event that such a lien is filed
against the Premises, then Tenant shall, within thirty (30) days from the date
that the lien is placed against the Premises, and at any rate prior to the date
any governmental authority commences proceedings to sell the Premises pursuant
to the lien, either: (a) pay the claim and remove the lien from the

                                      -25-


<PAGE>



Premises; or (b) furnish either (i) a bond satisfactory to Landlord in the
amount of the claim out of which the lien arises, (ii) a cash deposit in the
amount of the claim out of which the lien arises, or (iii) other security
satisfactory to Landlord in an amount sufficient to discharge the claim out of
which the lien arises.

                  49. EXISTING CONDITIONS. Tenant agrees that Landlord is not in
default of any of the provisions, terms, covenants or conditions of any prior
leases. Tenant further agrees that it does not now have or hold any defenses,
setoffs, or counterclaims against Landlord arising out of any prior leases or in
any way relating thereto, or arising out of any other transaction between Tenant
and Landlord which might be set off or credited against the accruing rents or
additional rents.

                  50. BINDING OFFER. It is understood and agreed by the Landlord
and Tenant that this Lease is an offer only and is submitted to Tenant for
signature with the understanding that it shall not bind Landlord unless and
until it has been executed by Landlord.

                  51. ENTIRE AGREEMENT. This Lease constitutes the entire
agreement between the parties. No representative, agent, or employee of the
Landlord has been authorized to make any representations or promises or to vary,
alter or modify the covenants hereof. No additions, changes, modifications,
renewals or extensions of this Lease shall be binding unless reduced to writing
and signed by the Landlord and the Tenant.

                  This Lease may not be cancelled or terminated by Tenant
without the consent of Landlord except as is specifically provided for elsewhere
in this Lease.

                  52. APPLICATION AND DURATION. Wherever in this Lease an
obligation is imposed upon or required of Tenant, same shall be at Tenant's sole
cost and expense.

                  Obligations of Tenant pursuant to the terms and conditions of
this Lease are: (a) for the Premises as set forth in exhibit "A" unless extended
in scope pursuant to any particular provision and/or as the sense and
circumstances of the text may require; (b) for the duration/term of the Lease
unless having application before the commencement date and/or if they survive
the expiration date or prior termination date pursuant to any provision
contained herein.

                  53. VALIDITY. The terms and conditions of this Lease shall be
deemed severable, if any clause or provision herein shall be adjudged to be
invalid or unenforceable by a court of competent jurisdiction or by the
operation of any applicable law, such an occurrence shall not affect the
validity of any other clause and/or provision herein, and this Lease and such
other clauses and provisions shall remain in full force and effect.


                                      -26-


<PAGE>



                  Landlord, however, at its option, may pursue the relief or
remedy sought in any invalid clause by conforming the said clause with the
provisions of the statutes or the regulations of any governmental agency as if
the particular provisions of the applicable statutes or regulations were set
forth herein at length.

                  54. COUNTERPARTS. This Lease may be executed in several
counterparts, each of which shall be deemed to be an original copy, and all of
which taken together shall constitute one agreement binding on all parties
hereto, notwithstanding that the parties shall not have signed the same
counterpart.

                  55. GENDER NEUTER. In all references herein to any pronouns,
parties, persons, entities, or corporation, the use of any particular gender or
the plural or singular number is intended to include the appropriate gender or
number as the sense and circumstances of the context may require.

                  56. BINDING AGREEMENT. All the terms and conditions contained
herein shall be for and shall inure to the benefit of and shall bind the
respective parties hereto, their heirs, successors and assigns.

                  57. APPLICABLE LAW. Landlord and Tenant agree that this Lease
and any suits and/or special proceedings under it will be governed and construed
pursuant to the laws of the State of New Jersey.

                  58. CAPTIONS. The captions are inserted only as a matter of
convenience and in no way define, limit or describe the scope of this Lease nor
the intent of any covenant thereof.

                  59. EXISTING CONDITIONS. Tenant agrees that Landlord is not in
default of any of the provisions, terms, covenants or conditions of the lease
dated April 22, 1985. Tenant further agrees that it does not now have or hold
any defenses, setoffs, or counterclaims against Landlord arising out of the
April 22, 1985 lease or in any way relating thereto, or arising out of any other
transaction between Tenant and Landlord which might be set off or credited
against the accruing rents or additional rents of the April 22, 1985 lease.

                  All prior leases between Landlord and Tenant shall terminate
with the commencement of this lease.


                                      -27-


<PAGE>


                  IN WITNESS WHEREOF, Landlord and Tenant have respectively
signed and sealed this Lease as of the date written.


                                              CHERRY HILL INDUSTRIAL SITES, INC.


/s/ Jeffrey Burke                             By: /s/ Paul H. Heise
- ---------------------------------                ----------------------------
Witness as to Landlord                           Paul Heise, President


                                              INTEST


/s/ Jeffrey Burke                             By: /s/ Jack Edmunds
- ---------------------------------                ----------------------------
Witness as to Tenant

                                              Date: February 16, 1996
                                                   --------------------------

                                      -28-








<PAGE>
                                 STANDARD LEASE


Lease Preparation Date:         AUGUST 5, 1996

Lessor:           KIP PROPERTIES,
                  a California General Partnership

DBA:              COMMERCE PARK - SUNNYVALE

         By:      R&B Commercial Management Company, Inc.
                  a California corporation
                  As Manager and Agent
                  2222 Corinth Avenue, RE: #P106
                  Los Angeles, California 90064

Lessee:           INTEST CORP., A NEW JERSEY CORP.

Trade Name:       INTEST CORP., A NEW JERSEY CORP.


1.       BASIC LEASE TERMS.

         1.1. "Premises": That certain space containing approximately 1,900
useable square feet, located in the area shown on the Site Plan attached hereto
as Exhibit A and more particularly described in the Space Plan attached hereto
as Exhibit A-1. The address of the Premises is: 1030 E. DUANE AVENUE, SUITE A,
SUNNYVALE, CALIFORNIA 94086.

         1.2. "Building Square Footage": Notwithstanding any other manner of
measurement, the parties agree that for the purpose of this Lease the total
Building Square Footage is 127,476 usable.

         1.3. "Lessee's Notice Address": The address of the Premises unless
otherwise specified here: 1030 E. DUANE AVE., SUITE A, SUNNYVALE, CALIFORNIA
94086.

         1.4. "Lessor's Notice Address": 1095 E. DUANE AVE, STE. 101, SUNNYVALE,
CALIFORNIA 94086.

         1.5. "Lessee's Permitted Use": GENERAL OFFICE, SALES, ENGINEERING AND
LIGHT MANUFACTURING.

         1.6. "Lease Term": The Lease Term shall commence on SEPTEMBER 1, 1996
and ends on AUGUST 31, 2001 ( 60 months, and 0 days).

         1.7. "Base Monthly Rent": $1,862.00 payable in lawful money of the
United States of America, and increased in accordance with the provisions of
this Lease.


<PAGE>

         1.8. "Security Deposit": $2,178.00 payable in lawful money of the
United States of America.

         1.9. "Lease Documentation Fee": N/A payable in lawful money of the
United States of America.

         1.10. "Lessee's Proportionate Share": .0149, as of date of execution of
this Lease.

         1.11. "Base Monthly Rent Increases": In the event that Lessee's Lease
Term is greater than twelve (12) months, Lessee's Base Rent will increase to the
amounts at the time noted below:

                    Effective Date of Increase           New Base Monthly Rent
                    --------------------------           ---------------------

                     SEPTEMBER 1, 1997                       $1,919.00
                     SEPTEMBER 1, 1998                       $1,995.00
                     SEPTEMBER 1, 1999                       $2,071.00
                     SEPTEMBER 1, 2000                       $2,147.00

         1.12. "Expense Base Year": The calendar year 1996.

         1.13. "Tax Base Year": The later of (i) the fiscal year commencing on
JULY 1, 1996 and ending on JUNE 30, 1997, or (ii) the first year in which a tax
bill for the Project reflects the full assessed value of the Project of improved
real property.

         1.14. "'Rent' or 'rent'": Base Monthly Rent, Additional Rent and/or any
other sum required to be paid by Lessee to Lessor hereunder, whether or not such
sums are specifically designated as rent in any other provision of this Lease.

         1.15. "Project": The land, buildings, landscaping, parking and other
improvements comprising that certain business complex of which the Premises are
a part.

2.       DEMISE AND POSSESSION.
         ---------------------


         2.1.  Demise.  Lessor hereby  leases to Lessee,  and Lessee leases from
Lessor,  the  Premises  for the Lease  Term and upon and  subject  to the terms,
conditions and other  provisions of this Lease.  Any statement of square footage
set forth in this Lease,  or that may have been used in calculating any rent due
hereunder,  is an approximation  which Lessor and Lessee agree is reasonable and
any rent based  thereon is not  subject  to  revision  whether or not the actual
square footage is more or less.

         2.2. Delay in Possession. If for any reason Lessor cannot deliver
possession of the Premises by the Commencement Date, Lessor shall not be subject
to any liability, nor shall the validity of this Lease be affected. If Lessee
has not contributed to such delay there shall

                                       -2-


<PAGE>

be a proportionate reduction of the Base Monthly Rent covering the period
between the Commencement Date and the date Lessor actually tenders possession of
the Premises to Lessee. If the Premises have not been tendered to Lessee on or
before one hundred twenty (120) days from the Commencement Date, then either
Lessor or Lessee shall have the right to terminate this Lease upon written
notice to the other (provided that the party giving such notice has not been the
cause of the delay).

         2.3. Condition and Disclosure. Lessee acknowledges that it has examined
the Premises and accepts the Premises "as is" and in its present condition,
subject to any work described as "Lessor's Work" to be performed by Lessor in
accordance with the terms and provisions of the Work Letter attached hereto as
Exhibit B. Lessor makes no representation or warranty whatsoever, express or
implied, concerning the fitness or suitability of the Premises or the Project
for the conduct of Lessee's business or for any other reason. Lessee
acknowledges that Lessee has made such investigations as it deems reasonable and
necessary with reference to such matters and assumes all responsibility therefor
as the same relate to Lessee's use and occupancy of the Premises and the
Project.

         2.4. Suite Acceptance Letter. Within five (5) days following Lessor's
tender of the Premises to Lessee, Lessor and Lessee shall sign a Suite
Acceptance Letter in the form attached hereto as Exhibit C, acknowledging the
actual commencement and expiration dates of the Lease Term, the Base Monthly
Rent, and all other information set forth in such form.

3.       BASE MONTHLY RENT.
         -----------------


         3.1. Base Monthly Rent. In advance, on the first day of each calendar
month of the Lease Term, Lessee shall pay, without deduction or offset, prior
notice or demand, Base Monthly Rent at the place designated by Lessor, provided
that Base Monthly Rent for the first full calendar month of the Lease Term is
due and payable upon execution of this Lease. In the event that the Lease Term
commences or ends on a day other than the first day of a calendar month, a
prorated amount of Base Monthly Rent shall be due for each such month,
calculated using a thirty (30) day month.

         3.2. Late Charges. Any rent which is not paid when due shall be deemed
to be late, and if any rent is not paid within ten (10) days after it becomes
due Lessee shall pay to Lessor as Additional Rent a late charge equal to ten
percent (10%) of the amount of such late rent or the sum of Fifty Dollars
($50.00), whichever is greater, for each month or fractional month from the date
due until paid. A Twenty-Five Dollar ($25.00) handling charge shall be paid by
Lessee to Lessor for each returned check and, thereafter, Lessee shall pay all
future payments of rent or other charges due by money order or cashier's check.
Lessor and Lessee agree that in the event of late rent payments or returned
checks, Lessor shall incur damages, the exact of amount of which are extremely
difficult or impossible to ascertain, and that the late charges and handling
charges described herein are not penalties but are a reasonable approximation of
the actual amount of such damages.


                                       -3-


<PAGE>

         3.3. Construction Obligations. The amount of Base Monthly Rent may
include the projected cost of construction of Lessee's improvements as indicated
on Exhibit B attached hereto. In the event that Lessee requests Lessor to
construct additional improvements or if the final construction costs exceed the
original estimates, such costs or expenses, upon itemized notice by Lessor,
shall be paid by Lessee to Lessor, or Lessor may increase the Base Monthly Rent
according to the terms and conditions outlined on Exhibit B, or elsewhere in
this Lease.

4.       ADDITIONAL RENT.
         ---------------

         4.1.     Definition.
                  ----------


                  (a) All charges payable by Lessee hereunder other than Base
Monthly Rent are sometimes referred to herein as "Additional Rent." Unless this
Lease provides otherwise, Additional Rent shall be due and payable with the next
monthly installment of Base Monthly Rent and is subject to the provisions of
Paragraph 3.2 hereof.

                  (b) The following terms shall have the meanings hereinafter
set forth:

                           (i) "Expense Comparison Year": Each calendar year
after the Expense Base Year.

                           (ii) "Operating Expenses": All costs and expenses of
ownership, operation, maintenance, management, repair and insurance of the
Project, including, but not limited to, the costs of the following: all
supplies, materials, labor and equipment, used in or related to the operation
and maintenance of the Project; all utilities, including, but not limited to,
water, electricity, gas, heating, lighting, sewer, waste disposal, security,
air-conditioning and ventilating costs and all charges relating to the use,
ownership or operation of the Project; all maintenance, management, janitorial
and service agreements related to the Project; all legal and accounting
services; all business license and similar fees; all insurance including, but
not limited to, the premiums and any other costs of fire, casualty and liability
coverage, rent abatement and earthquake insurance and any other type of
insurance related to the Project; all maintenance relating to the public and
service areas within and around the Project, including, but not limited to,
sidewalks, landscaping, service areas, driveways, parking areas, walkways,
building exteriors (including painting), signs and directories, including for
example, costs of resurfacing and restriping parking areas; amortization (along
with reasonable financing charges) of capital improvements made to the Project
which may be required
 by any government authority or which shall improve the
operating efficiency of the Project, including without limitation all expenses
associated with fire and life safety retrofitting; all Lessor's costs in
managing, maintaining, repairing, operating and insuring the Project, including
for example, clerical, supervisory and janitorial staff; however, Operating
Expenses shall not include depreciation on the Project, loan payments, executive
salaries or real estate broker commissions.


                                       -4-


<PAGE>



         4.2. Operating Expenses. All capitalized terms used in this Section
shall have the meanings ascribed to them in Paragraph 4.1(b), above.

                  (a) If the Operating Expenses incurred or paid by Lessor for
any Expense Comparison Year during the Lease Term are greater than the Operating
Expenses incurred or paid by Lessor for the Expense Base Year, then Lessee shall
pay as Additional Rent an amount equal to such increase multiplied by Lessee's
Proportionate Share. In the event of any partial Expense Comparison Year, Lessee
shall pay the increase, if any, based on the number of days of the Expense
Comparison Year included within the Lease Term.

                  (b) By April 1st of each Expense Comparison Year, Lessor shall
provide Lessee a statement of Lessor's best estimate of Lessee's share of any
increase in Operating Expense for such Expense Comparison Year over the costs
for the Expense Base Year. Beginning with the next regular Base Monthly Rent
payment, Lessee shall pay 1/12th of the increase multiplied by the number of
elapsed months from the commencement of the Expense Comparison Year and
thereafter shall continue to pay 1/12th of the increase each month until Lessee
receives the next Expense Comparison Year's statement. By April 1st following
each Expense Comparison Year, Lessor shall provide Lessee a statement showing
the total actual Operating Expenses for the calendar year just ended, and
Lessee's share of any increase over the Expense Base Year. If Lessee's estimates
paid to date for the preceding calendar year are less than Lessee's share of the
increase, Lessee shall pay the difference concurrently with the next payment of
Base Monthly Rent. In the event that Lessee has paid more than its share of
estimates for the preceding calendar year, Lessor shall credit such overpayment
towards Lessee's future Operating Expense obligations. Failure of Lessor to
furnish a statement of actual or estimated Operating Expenses shall not
constitute a waiver of Lessor's right to collect from Lessee any amounts payable
with respect to the increase in Operating Expenses.

                  (c) Lessee shall not be entitled to any reduction, refund,
offset, allowance or rebate in Base Monthly Rent or any other rent due hereunder
if the operating Expenses for any Expense Comparison Year are less than those of
the Expense Base Year. In addition, if for any reason Lessor does not elect to
bill Lessee for Operating Expense increases or estimates for a particular
Expense Comparison Year, Lessor's right to charge Lessee for such expenses in
subsequent years is not waived.

         4.3.     Taxes.
                  -----

                  (a) Definitions. The following terms shall have the meaning
set forth below:

                           (i) "Tax Comparison Year" is each fiscal year
commencing on the anniversary of the Tax Base Year and ending twelve (12) months
thereafter.


                                       -5-


<PAGE>

                           (ii) "Real Property Taxes" are all (i) real estate
taxes, general and special assessments, license fees, license taxes, business
license fees, commercial rental taxes, transit charges or taxes, levies and
charges, and any penalties imposed by any taxing authority against the Project;
(ii) any taxes or fees on Lessor's right to receive, or the receipt of, rent or
income from the Project or against Lessor's business of leasing and operating
the Project; (iii) any taxes or charges for fire protection, streets, sidewalks,
road maintenance, refuse or other services provided to the Project by any
governmental agency; (iv) any taxes imposed upon this transaction, or based upon
a re-assessment of the Project due to a change in ownership or transfer of all
or part of Lessor's interest in the Project; and (v) any charges or fees
replacing, substituting for, or in addition to any of the foregoing impositions
previously included within the definition of Real Property Tax. Real Property
Taxes do not, however, include Lessor's federal or state income, franchise,
inheritance or estate taxes.

                  (b) If the Real Property Taxes incurred or paid by Lessor for
any Tax Comparison Year ending or commencing during the Lease Term are greater
than the Real Property Taxes incurred or paid by Lessor for the Tax Base Year,
then Lessee shall pay Lessor an amount equal to such increase multiplied by
Lessee's Proportionate Share. In the event of any partial Tax Comparison Year,
Lessee shall pay the increase, if any, prorated for the number of days of such
Tax Comparison Year included within the Lease Term.

                  (c) Following the end of each Tax Comparison Year, Lessor
shall provide Lessee a statement of the amount of the increase, if any, in Real
Property Taxes, but failure to do so by Lessor shall not constitute a waiver of
Lessor's right to collect Lessee's share of any increase in Real Property Taxes.
Upon receipt of the statement, Lessee shall pay in full the amount of its share
of increase. If Real Property Taxes for any Tax Comparison Year is less than the
Tax Base Year amount, Lessee shall not be entitled to any reduction in rent or
to any refund offset, allowance or rebate of any nature. At Lessor's sole
discretion, Lessor may charge Lessee estimated Real Property Taxes and such
estimates shall be calculated and paid in a manner similar to that described
above for Operating Expense estimates. Should the Lease Term expire before
Lessor is able to determine the increase, if any, for the Lessee's last Tax
Comparison Year, Lessor shall estimate the increase and Lessee shall pay the
estimated amount upon demand by Lessor. If any estimate by Lessor which has been
paid by Lessee exceeds the actual amount of any increase in Real Property Taxes,
such difference shall be credited by Lessor against Lessee's future Real
Property Tax obligation. If such estimate is less than the actual amount of Real
Property Taxes, Lessee shall pay such difference to Lessor with the next
installment of Base monthly Rent.

         4.4. Personal Property Taxes. Lessee shall pay all taxes charged
against trade fixtures, furnishings, equipment or any other personal property
belonging to Lessee. Lessee shall have all personal property taxes billed
separately from the Project. If any of Lessee's personal property is taxed with
the Project, Lessee shall pay Lessor the taxes for the personal property upon
demand by Lessor.


                                       -6-


<PAGE>

         4.5. Other Impositions. Lessee agrees to pay as Additional Rent to
Lessor Lessee's share of any parking charges, utility surcharges, occupancy
taxes, or any other costs resulting from the statutes or regulations, or
interpretations thereof, enacted by any governmental authority in connection
with the use or occupancy of the Project or the parking facilities serving the
Project, or any part thereof.

         4.6. Place of Payment. All rent shall be paid by Lessee to Lessor at
Lessor's Notice Address.

5.       SECURITY DEPOSIT.
         ----------------

         5.1. Concurrently with the execution of this Lease, Lessee shall pay
the Security Deposit to Lessor as security for the faithful performance by
Lessee of all of the terms, covenants, conditions and agreements of this Lease.
If Lessee defaults with respect to any provision of this Lease, Lessor may
retain, use or apply all or any part of the Security Deposit to compensate
Lessor for any loss or damage suffered by Lessee's default including, but not
limited to, the failure of Lessee to pay any rent due hereunder, and for the
repayment of amounts Lessor is obligated to spend by reason of Lessee's default.
If any portion is so retained, used or applied, Lessee, upon demand, shall
deposit with Lessor an amount sufficient to restore the Security Deposit to the
original amount plus any increased amounts as required by this Lease. Lessor
shall not be required to keep the Security Deposit separate from its general
funds, and Lessee shall not be entitled to interest on it. If Lessee fully and
faithfully performs every provision of this Lease, the Security Deposit shall be
returned to Lessee after the expiration of the Lease Term and the surrender of
the Premises. In no event shall Lessee have the right to apply any part of the
Security Deposit to any rent payable under this Lease.

6.       LEASE DOCUMENTATION FEE.
         -----------------------

         6.1. For expenses incurred related to the transaction (or proposed
transaction) contemplated by this Lease including, but not limited to, legal
costs, administration and credit verification, Lessee shall pay to Lessor upon
execution of this Lease, the Lease Documentation Fee. Lessee acknowledges that
the Lease Documentation Fee is nonrefundable and shall not be credited to any
rent which may become due during the Lease Term.

7.       USE OF PREMISES.
         ---------------

         7.1. Permitted Use. The Premises may be used and occupied only for
Lessee's Permitted Use and for no other purpose. Lessee shall not use the
Premises or any portion of the Project in any manner which will violate any
covenants, conditions and restrictions and any federal, state and local laws,
ordinances, orders and regulations, including, without limitation, the Americans
with Disabilities Act, (collectively "Laws") affecting the Premises and the
Project. Lessee shall at all times during the term hereof promptly comply with
all

                                       -7-


<PAGE>

Laws affecting the Premises and the Project; provided, however, that if any such
Laws require new construction or installation in the Premises or in the Project,
which are not specifically required as a result of the use of the Premises or
the Project by Lessee or any assignee or sublessee of Lessee, Lessee shall not
be required to perform or pay for such construction or installations (except to
the extent that the cost of such construction or installations may be deemed to
be an Operating Expense hereunder, in which case, Lessee shall pay Lessee's
proportionate share of such cost). Notwithstanding the foregoing, to the extent
that any construction or installations to the Premises or the Project are
required by any Laws as a result of the use of the Premises or the Project by
Lessee or any assignee or sublessee of Lessee, then Lessee shall, at its sole
cost and expense, (i) immediately notify Lessor in writing of all actions
necessary to comply with such Laws, and (ii) if such action is required in the
Premises, promptly take all such action subject to the provisions of this lease
governing the making of alterations. If any such action is required outside the
Premises, Lessor shall have the option to perform such construction or
installations and to be reimbursed therefore by Lessee. Lessee shall not perform
any act or carry on any practices that may injure the Project or the Premises or
that may be a nuisance or menace, or that may disturb the quiet enjoyment of
other occupants in the Project including, but not limited to, any act or
practice resulting in the picketing of the Project or Premises by any person,
the use of equipment which causes vibration, the use or storage of chemicals, or
the generation of heat or noise which is not, in Lessor's sole opinion, property
insulated. Lessee shall not cause, maintain or permit any outside storage on or
about the Project. In addition, Lessee shall not perform any work or conduct any
business whatsoever in the Project, outside the premises, or allow any condition
or thing to remain on or about the Premises which diminishes the appearance or
aesthetic qualities of the Premises and/or the Project and/or the surrounding
property. Lessee shall not allow any animal to be brought upon the Project by
its agents, employees, contractors or invitees.

         7.2.     Hazardous Substances.
                  --------------------

                  (a) Definitions. For purposes of this Lease, the following
terms shall have the respective meanings indicated:

                           (i) "Hazardous Substances" shall include, but not be
limited to, substances defined as "hazardous substances," "hazardous materials,"
"toxic substances," "infectious waste," or any similar substance as defined and
used in any federal, state or local environmental control, health, or safety
laws applicable to the Premises or the Project (collectively, the "Environmental
Laws"), including the regulations adopted or publications promulgated pursuant
to any such laws, and any other legal requirements, as they may be amended from
time to time.

                  (b) Lessee shall not introduce any Hazardous Materials onto
the Project, without the prior specific written consent of Lessor, which Lessor
may withhold in its sole and absolute discretion, and Lessee shall comply with
all applicable legal requirements pertaining to the storage, handling, use or
disposal of any Hazardous Substances.

                                       -8-


<PAGE>

                  (c) Upon written request from time to time, Lessee shall
promptly provide to Lessor the following information pertaining to all
operations conducted in, on or about the Premises:

                           (i) Copies of all permits obtained from any local,
state or federal agency or other authority;

                           (ii) Material safety data sheets for all chemicals in
use at, manufactured at, imported to or stored at the Premises;

                           (iii) Copies of all materials filed with the Federal
Occupational Safety and Health Agency under the OSHA Hazardous Communication
Standard and all materials filed with the Department of Health, Department of
Environmental Protection of any other federal, state or local agency or entity;

                           (iv) Maps, diagrams and site plans showing the
location of all storage areas and containers for Hazardous Substances including
details as to the amounts stored or used;

                           (v) A description of the operations conducted on the
Premises and their processes;

                           (vi) A copy of any and all contracts entered into by
Lessee for the removal, transportation and/or disposal of any Hazardous
Materials from the Premises (if Lessee directly or indirectly causes any
Hazardous Materials to be located on the Project, Lessee shall promptly enter
into such a contract for removal and proper disposal thereof); and

                           (vii) Any other information that Lessor may
reasonably require.

                  The requirement to furnish information concerning Hazardous
Materials shall not be construed as meaning there are no restrictions on the
Hazardous Materials that may be stored or used at the Premises.

                  (d) In the event the Hazardous Substances are discovered upon,
in, or under the Project, and the applicable governmental agency or entity
having jurisdiction over the Project requires the removal of such Hazardous
Substances, Lessee shall be responsible for removing those Hazardous Substances
arising out of or related to the use or occupancy of the Premises and/or the
Project by Lessee or its agents, affiliates, customers, employees, business
associates or assigns but not those of its predecessors. Notwithstanding the
foregoing, Lessee shall not take any remedial action in or about the Premises or
the Project, or enter into any settlement agreement, consent decree or other
compromise with respect to any claims relating to any Hazardous Substance in any
way connected with the Premises or the Project without first notifying Lessor of
Lessee's intention to do so and affording Lessor the opportunity to appear,
intervene or otherwise appropriately assert and protect Lessor's

                                       -9-


<PAGE>

interest with respect thereto. Lessee shall immediately notify Lessor in writing
of: (i) any spill, release, discharge or disposal of any Hazardous Substance in,
on or under the Premises, the Project or any portion thereof, (ii) any
enforcement, cleanup, removal or other governmental or regulatory action
instituted, contemplated, or threatened pursuant to any Environmental Laws,
(iii) any claim made or threatened by any person against Lessee, the Premises,
or the Project relating to damage, contribution, cost recovery, compensation,
loss or injury resulting from or claimed to result from any Hazardous
Substances; and (iv) any reports made to any environmental agency arising out of
or in connection with any Hazardous Substances in, on or removed from the
Premises or the Project, including any complaints, notices, warnings, reports or
asserted violations in connection therewith.

                  (e) Lessor shall have the right, in its sole discretion, to
require Lessee, at Lessee's sole cost and expense, to undertake and submit to
Lessor a periodic environmental audit from an environmental company approved by
Lessor, which audit shall cover Lessee's compliance with this Section 7.2. An
environmental audit shall be conducted, at Lessee's sole cost and expense, in
connection with Lessee's surrender of the Premises at the expiration or earlier
termination of the Lease. Lessee shall promptly comply with all requirements of
such audit and cure all matters raised therein at Lessee's sole cost. Lessee
also agrees to comply with Lessor's request for additional information including
questionnaires, necessary to assure Lessor of Lessee's compliance with the
provisions of this Section 7.2.

                  (f) Lessee shall indemnify, protect, defend (with counsel
chosen by Lessor) and hold harmless Lessor, Lessor's affiliates, and their
partners, officers, directors, employees, agents (including any managing agent
of the Project) and other representatives, and their successors and assigns,
from and against any and all claims, demands, actions or liabilities for, and
any and all loss or cost (including legal fees and expenses) in connection with
(i) any injury, death, or damage, whether alleged or proven, direct or
consequential, foreseeable or unforeseeable, directly or indirectly arising out
of or related to the presence, use, generation, storage, discharge, spillage,
seepage or disposal of Hazardous Substances by or with the knowledge or consent
of Lessee or its officers, directors, employees, agents or representatives, and
(ii) any required or necessary removal, repair, clean up or detoxification
directly or indirectly arising out of or related to the presence, use,
generation, storage, discharge, spillage, seepage or disposal of Hazardous
Substances on, under or about the Premises during the Lease Term.

                  (g) Throughout the Lease Term (and for any other period Lessee
or its successors and assigns may occupy all or part of the Premises), Lessee
shall post, publish, or otherwise give notice of the existence of asbestos,
asbestos-containing materials, tobacco and tobacco smoke, and all other
Hazardous Substances in or about the Premises or the Project, in accordance with
all applicable legal requirements, to Lessee's employees, contractors, visitors,
and invitees and any others who may be entitled to notice under applicable legal
requirements.


                                      -10-


<PAGE>

                  (h) All representations, warranties, covenants and other
obligations of Lessee with respect to Hazardous Substances shall survive the
expiration or earlier termination of this Lease.

                  (i) ANY CLAIM BETWEEN LESSOR AND LESSEE WHICH DIRECTLY OR
INDIRECTLY RELATES TO OR ARISES OUT OF THE EXISTENCE OF A HAZARDOUS SUBSTANCE
IN, ON OR ABOUT THE PROJECT, WHETHER BASED UPON THE THEORY OF NEGLIGENCE, STRICT
LIABILITY, BREACH OF LESSOR'S WARRANTY OF HABITABILITY (IF ANY) OR ANY OTHER
THEORY, SHALL BE SUBMITTED TO AND DECIDED BY BINDING ARBITRATION. BOTH PARTIES
TO THIS LEASE, BY INITIALING THIS PROVISION, ARE GIVING UP THEIR RIGHT TO HAVE
ANY SUCH CLAIM DECIDED IN A COURT OF LAW BEFORE A JUDGE OR JURY. SUCH
ARBITRATION SHALL BE HELD IN THE CITY AND STATE WHERE THE PROJECT IS LOCATED IN
ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION FOR A SINGLE
ARBITRATOR. THE ARBITRATOR SHALL AWARD ALL COSTS AND EXPENSES, INCLUDING
REASONABLE ATTORNEYS' FEES, TO THE PREVAILING PARTY IN SUCH ARBITRATION. IF THE
PROJECT IS IN CALIFORNIA, ALL OF THE PROVISIONS OF CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 1283.05 SHALL BE INCORPORATED INTO AND MADE APPLICABLE TO,
THIS ARBITRATION AGREEMENT; IF THE PROJECT IS IN ANY OTHER STATE, THIS PROVISION
SHALL BE CONSTRUED TO CONFER SIMILAR RIGHTS OF DISCOVERY UPON THE PARTIES TO THE
EXTENT PERMISSIBLE UNDER THE LAWS OF SUCH STATE. THE ARBITRATOR'S AWARD,
INCLUDING WITHOUT LIMITATION ANY PERMANENT INJUNCTION AWARDED BY THE ARBITRATOR,
SHALL BE ENFORCEABLE IN ANY COURT OF COMPETENT JURISDICTION. NOTHING HEREIN
SHALL BE DEEMED TO LIMIT THE RIGHT OF EITHER PARTY TO BRING ANY ACTION IN ANY
COURT TO THE EXTENT SUCH PARTY IS REQUESTING A TEMPORARY RESTRAINING ORDER OR A
PRELIMINARY INJUNCTION, BUT THE REMEDY OF PERMANENT INJUNCTION MAY BE AWARDED
ONLY BY THE ARBITRATOR IN ACCORDANCE WITH THE PROVISIONS OF THIS PARAGRAPH.
NOTHING HEREIN SHALL BE DEEMED TO LIMIT LESSOR'S RIGHTS IN THE EVENT OF LESSEE'S
DEFAULT UNDER THIS LEASE, INCLUDING WITHOUT LIMITATION LESSOR'S RIGHT TO BRING
AN ACTION FOR UNLAWFUL DETAINER UNDER THE LAWS OF THE STATE WHEREIN THE PROJECT
IS LOCATED. FOR ANY PARTICULAR DISPUTE CONCERNING HAZARDOUS SUBSTANCES WHICH IS
ARBITRABLE HEREUNDER, THIS ENTIRE PROVISION SHALL BE DEEMED TO BE OF NO EFFECT
ONLY FOR SUCH PERIOD OF TIME THAT LESSEE AND LESSOR ARE BOTH NAMED PARTIES IN
ANY THIRD PARTY LITIGATION WHICH ARISES OUT OF THE SUBJECT MATTER OF SUCH
ARBITRABLE DISPUTE.


                                      -11-


<PAGE>



8.       TENANT IMPROVEMENTS.
         -------------------

         8.1. Any Tenant Improvements to be performed in the Premises ("Tenant
Improvements") shall be performed in accordance with the terms, conditions and
other provisions of the Work Letter attached hereto as Exhibit B. Except for
that work designated in the Work Letter as "Lessor's Work," Lessor shall be
under no obligation to alter, improve or otherwise perform any work in the
Premises prior to or during the Lease Term.

9.       PARKING.
         -------

         9.1. Lessee and Lessee's customers, suppliers, employees, and invitees
have the non-exclusive right to park in common with other lessees and/or persons
in the parking facilities as designated by Lessor. Lessee shall not overburden
the parking facilities and shall cooperate with Lessor and/or other lessees and
persons in the use of the parking facilities. Lessor reserves the right to
assign specific spaces and/or charge Lessee therefor as Additional Rent, to make
changes in the parking layout from time to time, and to establish reasonable
time limits on parking.

10.      LESSOR'S RIGHTS.
         ---------------

         10.1. All portions of the Project not within the Premises are reserved
to Lessor. Lessor also reserves to itself the use of and access through the
Premises to all spaces in or adjacent to the Premises which are used for shafts,
stacks, pipes, conduits, fan rooms, ducts, electric or other utilities, sink or
other building facilities, for the purpose of operating, maintaining, repairing
and/or replacing the same. Without limiting the generality of the foregoing,
Lessor shall have the right, without notice or liability to Lessee for damage or
injury to property, persons or business, and without effecting an eviction or
disturbance of Lessee's use or possession or giving rise to any claim for
setoffs or abatement of rent, to (i) change the location and/or arrangement of,
and/or to otherwise alter, plazas, entrances, passageways, doors, elevators,
stairs, restroom facilities, and other public or common portions of the
buildings and property not within the Premises, (ii) decorate, remodel, repair,
alter, or otherwise prepare the Premises for re-occupancy or other use at any
time after Lessee abandons the Premises, (iii) impose such controls on the
manner of access to the buildings as Lessor may deem appropriate for the
security of such buildings and their occupants (but Lessor shall have no duty to
do so), and (iv) do or permit to be done any work in or about the exterior of
such buildings or any adjacent or nearby building, land, street or alley.

11.      UTILITIES.  (Delete 11.1 or 11.2)
         ---------

         [11.1. Deleted]


                                      -12-


<PAGE>

         11.2. Unserviced Space. Lessee shall pay for all water, gas, heat,
light, power, sewer, electricity, or other services metered, chargeable to or
provided to the Premises. Lessor reserves the right to install separate meters
for any such utility.

         11.3. No Liability. Lessor shall not be liable or deemed to be in
default hereunder, nor shall there be any abatement of rent for any interruption
or reduction of utilities (including telephone service) or services to the
Project. Lessee agrees to comply with all energy conservation programs
implemented by Lessor.

         11.4. Telephone Service. Lessee shall contract and pay for all
telephone and similar services for the Premises subject to the provisions of
this Lease.

12.      ALTERATIONS; MECHANIC'S LIENS.
         -----------------------------

         12.1. Alteration. Lessee shall not make any alterations to the Premises
without Lessor's prior written consent, which shall not be unreasonably
withheld. Lessor's approval shall be deemed not to have been unreasonably
withheld if Lessor refuses to grant approval because (i) Lessee's proposed
alterations would potentially disturb any asbestos or Hazardous Substances in
the Project, or (ii) Lessee's proposed alterations would affect any roof,
foundation or other structural or mechanical system of the Project, would alter
any common area in the Project, would be visible from the exterior of the
Premises, or would fail to comply with any design criteria uniformly applied to
the majority of lessees in the Project. Lessee shall have no right whatsoever to
make any alterations to any portion of the Project other than the Premises. In
the event Lessor gives its consent, no such alterations shall proceed without
Lessor's prior written approval of (i) Lessee's contractor; (ii) insurance
policies, or other evidence acceptable to Lessor of the existence of insurance
coverage in favor of Lessee's contractor, for public liability including bodily
injury and property damage with a combined single limit of not less than
$1,000,000, for automobile liability, including owned, non-owned and hired
vehicles, with a limit of not less than $500,000 per occurrence,

                                      -13-


<PAGE>

each of the preceding policies to be endorsed to name Lessor as an additional
insured, for worker's compensation in the limits required by law, and for
employer's liability with limits not less than $1,000,000; and (iii) detailed
plans and specifications for such work. Lessee shall reimburse Lessor upon
demand for all fees and other costs incurred by Lessor including, without
limitations any fees of consulting architects, engineers or the like, and of any
managing agent for the review of proposed plans, whether or not approved,
including, without limitation, if the work is approved, a fee (the "Work Review
Fee") equal to ten percent (10%) of the construction cost of the work (including
the value of any change orders) to reimburse Lessor for the cost of supervising
Lessee's work. Lessor's approval of the plans, specifications and working
drawings for Lessee's alterations shall create no responsibility or liability on
the part of Lessor for their completeness, design sufficiency or compliance with
all laws, rules and regulations of governmental agencies or authorities. The
Work Review Fee shall be estimated and paid to Lessor prior to the commencement
of any alterations work. If the actual cost to construct the work exceeds the
initial estimate, the Work Review Fee shall be increased accordingly, and such
increase shall be paid to Lessor upon demand. Before any alterations may begin,
valid building permits or other required permits or licenses must be furnished
to Lessor, and, once the alterations begin, Lessee shall diligently and
continuously pursue their completion. At Lessor's option, any alterations may
become part of the realty and belong to Lessor. If requested by Lessor, Lessee
shall pay, prior to the commencement of construction, an amount determined by
Lessor necessary to cover the costs of demolishing such alterations and/or the
cost of returning the Premises to their condition before any such alterations.
Lessor may also require Lessee to provide Lessor, at Lessee's sole cost and
expense, a payment and performance bond in form acceptable to Lessor, in a
principal amount not less than one and one-half times the estimated costs of
such alterations, to insure Lessor against any liability for mechanic's and
materialmen's liens and to insure completion of work.

         12.2. Trade Fixtures. Notwithstanding anything to the contrary in
Paragraph 12.1 above, Lessee may, with prior written consent of Lessor, install
trade fixtures, equipment, and machinery in conformity with all applicable laws,
and such fixtures shall, at the option of Lessor, be removed upon termination of
this Lease and the Premises shall be restored to their original condition,
except for reasonable wear and tear. Lessee shall repair any damage to the
Premises occasioned by the removal of such fixtures.

         12.3. Telephones. Private telephone systems and/or other related
telecommunications equipment and lines may not be installed without Lessor's
prior consent, which shall not be unreasonably withheld. All private telephone
equipment shall be installed entirely within the interior of the Premises. Prior
to the expiration of the Lease Term, all such equipment shall be removed and the
Premises restored to substantially the same condition as before such
installation.

         12.4. Costs and Liens. Lessee shall pay when due all costs for
alterations and shall keep the Premises, the Project and the underlying property
free from any liens arising out of worked performed for, materials furnished to
or obligation incurred by Lessee. Lessee shall

                                      -14-


<PAGE>

give Lessor no less than three (3) and no more than five (5) days prior written
notice of the date such alterations will commence, to enable Lessor to post such
Notices of Nonresponsibility as Lessor deems appropriate. Lessee shall promptly
pay all contractors and materials suppliers furnishing labor and materials in
connection with any such alterations, so as to avoid the filing of any lien
against the Premises or the Project. If any such lien is filed, Lessee shall
cause the same to be released no later than ten (10) days following the filing
thereof. If Lessee fails to cause the release of any lien as provided above,
Lessor may pay the demand of the lien claimant in full or otherwise cause the
release of such lien, and Lessee shall reimburse Lessor for all such costs upon
demand.

         12.5. Rights of Lessor. Lessor shall have the right to construct or
permit construction of tenant improvements in or about the Project for existing
and new lessees and to alter any public areas in and around the Project.
Notwithstanding anything in this Lease to the contrary, no such construction
shall be deemed to constitute a breach of this Lease by Lessor and Lessee waives
any such claims which it might have arising from any such construction.

13.      FIRE INSURANCE; HAZARDS AND LIABILITY INSURANCE.
         -----------------------------------------------

         13.1. Use. Lessee shall not do or permit anything to be done within or
about the Premises which shall increase the existing rates of insurance on the
Project or cause the cancellation of any insurance policy covering the Project.
Nor shall Lessee keep, use or sell, or permit anyone to keep, use or sell, any
article in or about the Premises, which may be prohibited by the standard form
of fire and other insurance policies. Lessee shall, at its sole cost and
expense, comply with any requirements of any insurance organization insuring the
Project or any portion thereof. Lessee agrees to pay to Lessor, as Additional
Rent, any increases in premiums on policies resulting from Lessee's Permitted
Use or other use consented to by Lessor which increases Lessor's premiums or
requires extended coverage by Lessor to insure the Premises.

         13.2. Fire Insurance. Lessee, at all times during the term of this
Lease and at Lessee's sole expense, shall maintain a policy of standard fire and
extended coverage insurance with "all risk" coverage on all Lessee's
improvements and alterations in or about the Premises and on all personal
property and equipment to the extent of at least ninety percent (90%) of their
full replacement value. The proceeds from this policy shall be used by Lessee
for the replacement of personal property and equipment and the restoration of
Lessee's improvements and/or alterations. This policy shall contain an express
waiver, in favor of Lessor, of any right of subrogation by the insurer. Without
limiting the generality of any other waiver or release that may be contained in
this Lease, Lessee, on behalf of itself, its agents, directors, officers,
principals, employees, representatives and successors and assigns, hereby
releases Lessor, its agents, directors, officers, principals, employees and
representatives of any claim that it might otherwise have against Lessor for
destruction, damage, or other loss with respect to Lessee's property by fire or
other cause as to which

                                      -15-


<PAGE>

Lessee is required to maintain insurance, whether or not such insurance is
actually maintained.

         13.3. General Liability. Lessee, at all times during the term of this
Lease and at Lessee's sole expense, shall maintain a policy of commercial
general liability coverage with a combined single limit of not less than
$2,000,000 for bodily injury and property damage insuring against all liability
of Lessee and its authorized representatives arising out of or in connection
with Lessee's use or occupancy of the Premises and including contractual
liability coverage for the indemnification and other obligations of Lessee under
this Lease. This policy of insurance shall name Lessor and any managing agent of
the Project as an additional insured and shall release Lessor and any managing
agent of the Project from any claims for damage to any person, any property, the
Premises, and the Project, and to Lessee's personal property, equipment,
improvements and alterations in or on the Premises or the Project, caused by or
resulting from risks which are to be insured against by Lessee under this Lease.

         13.4. Requirements. All insurance required to be provided by Lessee
under this Lease shall (a) be issued by insurance companies authorized to do
business in the state in which the Premises are located, and maintaining during
the policy term a "General Policyholders Rating" of at least A-, VI, or such
other rating as may be required by any Lender, as set forth in the most current
issue of "Best's Insurance Guide," (b) be primary and noncontributing with any
insurance carried by Lessor, (c) require a deductible of no more than $1,000,
and (d) contain an endorsement requiring at least thirty (30) days prior written
notice of cancellation to Lessor and any managing agent before cancellation or
change in coverage under any policy. Lessee shall deliver a certificate of
insurance or a copy of the policy to Lessor prior to taking occupancy of the
Premises and shall provide evidence of renewed insurance coverage prior to the
expiration of any policies. No insurance required or obtained by Lessee
hereunder shall limit any liabilities or obligations of Lessee to Lessor under
this Lease.

14.      INDEMNIFICATION AND WAIVER OF CLAIMS.
         ------------------------------------

         14.1. Waiver. Except to the extent of Lessor's gross negligence or
willful misconduct, Lessee, on behalf of itself, its agents, principals,
employees, representatives, successors and assigns, hereby releases Lessor and
its agents, principals, employees, representatives, successors and assigns, and
waives all claims against such parties for damage to any property in or about
the Premises or the Project and for injury to any persons, including death
resulting therefrom regardless of cause or time of occurrence.

         14.2. Indemnification. Lessee shall defend, protect, indemnify and hold
Lessor, its agents, employees, principals, representatives, successors and
assigns, harmless from and against any and all claims, actions, proceedings,
expenses, damages and liabilities, including attorneys' and consultants' fees,
arising out of, connected with, or resulting from any use of the Project by
Lessee, its agents, employees, contractors, visitors or licensees, including,
without limitation, any failure of Lessee to comply fully with all of the terms
and conditions

                                      -16-


<PAGE>

of this Lease, except for any damage or injury which is the direct result of the
willful misconduct or gross negligence of Lessor, it employees, or agents.

         14.3. Exemption of Landlord From Liability. Except to the extent of
Lessor's gross negligence or willful misconduct, Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other personal
property of Lessee, or that of any employee, contractor, invitee or agent of
Lessee, or of any other person in the Project with or without the consent of
Lessor, or any other person in the Project with the consent of Lessee, whether
such injury or damage is caused by or results from fire, steam, electricity,
gas, water or rain, or from the breakage, leakage, obstruction or other defects
of pipes, fire sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures, or from any other cause, whether the said injury or damage
results from conditions arising on the Premises or any other portion of the
Project, or from any other source, including injury or damage caused by persons
on the Project with or without the consent of Lessor or any other party, and
regardless of whether the means of repairing the same is accessible or not.
Notwithstanding Lessor's negligence or breach of this Lease, Lessor shall under
no circumstances be liable for injury to Lessee's business or for any loss of
income or profit therefrom.

15.      REPAIRS.

         15.1. In General. Lessee shall, at its sole cost, keep and maintain the
Premises and every part thereof including, without limitation, interior windows,
skylights, doors, any store fronts and the interior of the Premises, in good and
sanitary order, condition and repair. Lessee shall also at its sole cost keep
and maintain all utilities, fixtures, plumbing and mechanical equipment (except
for all HVAC equipment, which shall be maintained by Lessor and charged to
Lessee as an Operating Expense) used by Lessee in good order and repair and
furnish all expendables (e.g., light bulbs, paper goods, soaps, etc.) used in
the Premises. The standard for comparison and need of repair will be the
condition of the Premises at the commencement of this Lease and all repairs
shall be made by a licensed and bonded contractor approved by Lessor.

         15.2. Lessor's Rights. Lessee shall not make repairs to the Premises at
the cost of Lessor whether by reduction of rent or otherwise; neither shall
Lessee have any right to vacate the Premises or terminate the Lease if repairs
are not made. Lessee hereby waives all rights Lessee may have under Section 1942
of the California Civil Code to make repairs and deduct the cost of the same
from any rent due Lessor from Lessee hereunder. If during the Lease Term, any
alteration, addition or change to the Premises is required by legal authorities,
Lessee, at its sole expense, shall promptly make the same. Lessor reserves the
right to make any such repairs not made or maintained in good condition by
Lessee and Lessee shall reimburse Lessor for all such costs upon demand.


                                      -17-


<PAGE>

16.      SALES; SIGNS.
         ------------

         16.1. Lessee shall not conduct or permit to be conducted any auction or
sale on the Premises or the Project. Lessor shall have the exclusive right to
control the placement, size, content and quality of any signs, and Lessee shall
comply with the terms and conditions of the Sign Criteria set forth in Exhibit D
attached hereto. Lessee shall not place signs which are visible from the outside
of any buildings of the Project. Any signs not in conformity with this Lease or
the Sign Criteria may be removed by Lessor at Lessee's expense.

17.      ENTRY BY LESSOR.
         ---------------

         17.1. In General. Lessor and Lessor's agents and contractors shall have
the right to enter the Premises at all reasonable times for the purpose of
inspecting the same, maintaining the Project, or making repairs, alterations or
additions to any portion of the Project, including, without limitation, the
erection and maintenance of scaffolding, canopies, fences and props, posting
notices of nonresponsibility, showing the Premises to prospective tenants during
the last six (6) months of the Lease Term, or placing upon the Project any usual
or ordinary "for sale" signs, without any abatement of rent and without any
liability to Lessee for any loss of occupation or quiet enjoyment of Premises
thereby occasioned. Lessee shall permit Lessor at any time within sixty (60)
days prior to the expiration of this Lease, to place upon the Premises any usual
or ordinary "to let" or "to lease" signs. Lessor shall at all times have and
retain a key with which to unlock all of the doors in, upon and about the
Premises, excluding Lessee's vaults, safes and filing cabinets. Lessee shall not
alter any lock or install any new or additional lock or any bolt on any door of
the Premises without the prior written consent of Lessor, which shall not be
unreasonably withheld. If Lessor gives its consent, such work shall be
undertaken by a locksmith approved by Lessor, at Lessee's sole cost, and Lessee
shall furnish Lessor with a key. Lessor retains the right to charge Lessee for
restoring any altered doors to their condition at any time prior to or following
the installation of the new or additional locks.

18.      ABANDONMENT.
         -----------

         18.1. Lessee shall not vacate or abandon the Premises at any time
during the Lease Term or permit the Premises to remain unoccupied for a period
longer than fifteen (15) consecutive days during the Lease Term. If Lessee
abandons, vacates or surrenders the Premises, or is dispossessed by process of
law, or otherwise, any personal property belonging to Lessee left in or about
the Premises will, at the option of Lessor be deemed abandoned and may be
disposed of by Lessor in the manner provided for by the laws of the state in
which the Premises are located.

19.      DAMAGE OR DESTRUCTION.
         ---------------------

         19.1. Definitions. The following terms shall have the meanings
hereinafter set forth:


                                      -18-


<PAGE>

                  (a) "Partial Damage" shall mean damage or destruction to any
improvements on the Project, other than those owned by Lessee, which damage or
destruction would, in Lessor's judgment, require fewer than ninety (90) days
from the date such damage or destruction occurs to repair or restore.

                  (b) "Total Destruction" shall mean damage or destruction to
the Project, other than to improvements owned by Lessee, which damage or
destruction would, in Lessor's judgment, require longer than ninety (90) days
from the date such damage or destruction occurs to repair or restore.

                  (c) "Insured Loss" shall mean damage or destruction to
improvements on the Project, other than to improvements owned by Lessee, which
was caused by an event covered by the casualty insurance carried by Lessor on
the Project, irrespective of any deductible amounts or coverage limits involved.

                  (d) "Replacement Cost" shall mean the cost, at the time of the
occurrence of such damage or destruction, to repair or rebuild the Project to
its condition existing immediately prior thereto, including, without limitation,
demolition, debris removal and upgrading required by the operation of applicable
building codes, ordinances or laws, and without deduction for depreciation.

                  (e) "Hazardous Substance Condition" shall mean the occurrence
or discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 7 hereof, on, under or about any
portion of the Project.

         19.2. Partial Damage -- Insured Loss. If any Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage
as soon as reasonably possible and this Lease shall continue in full force and
effect. Notwithstanding the foregoing, if the insurance proceeds are not
sufficient to effect such repair, Lessor shall have no obligation to pay for the
shortage in insurance proceeds or to fully restore the unique aspects of the
Project unless Lessee provides Lessor with the funds to cover same, or adequate
assurance thereof, within ten (10) days following receipt of written notice of
such shortage and request therefor. If Lessor receives said funds or adequate
assurance thereof within said ten (10) day period, Lessor shall complete the
repairs as soon as reasonably possible and this Lease shall remain in full force
and effect. If Lessor does not receive such funds or assurance within said
period, Lessor may nevertheless elect by written notice to Lessee within ten
(10) days thereafter to make such restoration and repair as is commercially
reasonable with Lessor paying any shortage in proceeds, in which case this Lease
shall remain in full force and effect. If in such case Lessor does not so elect,
then this Lease shall terminate sixty (60) days following the occurrence of the
damage or destruction. Lessee shall in no event have any right to reimbursement
from Lessor for any destruction.

         19.3. Partial Damage -- Uninsured Loss. If Partial Damage that is not
an Insured Loss occurs, unless caused by a negligent or willful act of Lessee
(in which event Lessee

                                      -19-


<PAGE>

shall make the repairs at Lessee's expense and this Lease shall continue in full
force and effect), Lessor may, at Lessor's option, either: (i) repair such
damage as soon as reasonably possible at Lessor's expense, in which event this
Lease shall continue in full force and effect, or (ii) give written notice to
Lessee within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such damage of Lessor's desire to terminate this Lease as of the
date sixty (60) days following the giving of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessee's commitment to pay for the repair of
such damage totally at Lessee's expense and without reimbursement from Lessor.
Lessee shall provide Lessor with the required funds or satisfactory assurance
thereof within thirty (30) days following Lessee's said commitment. In such
event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible and the required
funds are available. If Lessee does not give such notice and provide the funds
or assurance thereof within the times specified above, this Lease shall
terminate as of the date specified in Lessor's notice to termination.

         19.4. Total Destruction. Notwithstanding any other provision hereof, if
a Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a negligent or willful act of
Lessee. In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee.

         19.5. Damage Near End of Term. If at any time during the last six (6)
months of the term of this Lease there is Partial Damage, whether or not an
Insured Loss, Lessor may, at Lessor's option, terminate this Lease effective
sixty (60) days following the date of occurrence of such damage by giving
written notice to Lessee of Lessor's election to do so within thirty (30) days
after the date of occurrence of such damage. Provided, however, if Lessee at
that time has an exercisable option to extend this Lease or to purchase the
Premises, then Lessee may preserve this Lease by, within twenty (20) days
following the date of occurrence of the damage, or before the expiration of the
time provided in such option for its exercise, whichever is earlier ("Exercise
Period"), (i) exercising such option and (ii) providing Lessor with any shortage
in insurance proceeds (or adequate assurance thereof) needed to make the
repairs. If Lessee duty exercises such option during said Exercise Period and
provides Lessor with funds (or adequate assurance thereof) to cover any shortage
in insurance proceeds, Lessor shall, at Lessor's expense, repair such damage as
soon as reasonably possible and this Lease shall continue in full force and
effect. If Lessee fails to exercise such option and provide such fund or
assurance during said Exercise Period, then Lessor may at Lessor's option
terminate this Lease as of the expiration of said sixty (60) day period
following the occurrence of such damage by giving written notice to Lessee of
Lessor's election to do so within ten (10) days after the expiration of the
Exercise Period, notwithstanding any term or provision in the grant of option to
the contrary.


                                      -20-


<PAGE>
         19.6.             Abatement of Rent; Lessee's Remedies.
                           ------------------------------------

                  (a) In the event of damage described in Paragraph 19.2 above,
whether or not Lessor or Lessee repairs or restores the Project, and provided
that such damage or destruction was not the fault of Lessee, the Base Monthly
Rent and all other charges payable by Lessee hereunder for the period during
which such damage, its repair or restoration continues, shall be abated only to
the extent that such damage or destruction interferes with Lessee's ability to
conduct business in the Premises. Except for the abatement of rent obligations
hereunder, all other obligations of Lessee hereunder shall be performed by
Lessee, and Lessee, shall have no claim against Lessor for any damage suffered
by reason of any such repair or restoration.

                  (b) If Lessor shall be obligated to repair or restore the
Project under the provisions of this Paragraph 19, and shall not commence, in a
substantial and meaningful way, the repair or restoration thereof within sixty
(60) days after such obligation shall accrue, and as a result thereof Lessee is
unable to conduct business in the Premises, Lessee may, at any time prior to the
commencement of such repair or restoration, give written notice to Lessor and to
any mortgagee or beneficiary under any mortgage or deed of trust, and any
groundlessee under any ground lease, encumbering the Project (jointly or
severalty herein, the "Lenders," or a "Lender"), of which Lessee has actual
notice, of Lessee's election to terminate this Lease on a date not less than
sixty (60) days following the giving of such notice. If Lessee gives such notice
to Lessor and such Lenders and such repair or restoration is not commenced
within thirty (30) days after receipt of such notice, this Lease shall terminate
as of the date specified in said notice. If Lessor or any Lender commences the
repair or restoration of the Premises within thirty (30) days after receipt of
said notice, this Lease shall continue in full force and effect. "Commence" as
used in this Paragraph shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on the
Premises, whichever first occurs.

         19.7. Hazardous Substance Conditions. If a Hazardous Substance
Condition occurs and Lessee is not responsible to remediate the same pursuant to
Paragraph 7 hereof, Lessor may, at Lessor's option, either (i) give written
notice to Lessee of Lessor's intention to fund such remediation, in which event
this Lease shall continue in full force and effect, or (ii) give written notice
to Lessee of Lessor's election to terminate this Lease as of the date sixty (60)
days following the giving of such notice. If Lessor elects to fund such
remediation as provided in (i) above, Lessor shall promptly commence the same.
If a Hazardous Substance Condition occurs and Lessee is not responsible for
remediation thereof pursuant to Paragraph 7 hereof, Lessee's obligations under
this Lease shall be abated to the same extent as provided in Paragraph 19.6
above.

         19.8. Waiver Statutes. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises or
the Project with respect to the termination of this Lease and hereby waive the
provisions of any present or future statute to the extent inconsistent herewith.

                                      -21-


<PAGE>

20.      ASSIGNMENT, SUBLETTING AND TRANSFERS OF OWNERSHIP.
         -------------------------------------------------

         20.1. No Transfer. Lessee shall not, without Lessor's prior written
consent, which shall not be unreasonably withheld, assign, sell, mortgage,
encumber, convey, or otherwise transfer all or any part of Lessee's leasehold
estate granted hereunder, or permit the Premises to be occupied by anyone other
than Lessee and Lessee's employees, or sublet the Premises or any portion
thereof (collectively called "Transfer"). If Lessee is a partnership or a
corporation, any transfer of general partnership interests or any transfer or
issuance of stock resulting in a change in control of Lessee, shall be deemed to
be an assignment hereunder.

         20.2. Lessor's refusal to grant consent to any proposed Transfer shall
be deemed to have been reasonable if: (a) in the reasonable judgment of Lessor
the transferee is of a character or is engaged in a business which is not in
keeping with the standards of Lessor for the Project; (b) in the reasonable
judgment of Lessor any purpose for which the transferee intends to use the
Premises is not in keeping with the standards of Lessor for the Project;
provided in no event may any purpose for which transferee intends to use the
Premises be in violation of this Lease; (c) the portion of the Premises subject
to the transfer is not regular in shape with appropriate means of entering and
exiting, including adherence to any local, county or other governmental codes,
or is not otherwise suitable for the normal purposes associated with such a
Transfer; (d) Tenant is in default under this Lease or any other Lease with
Lessor; (e) transferee's net worth is less than the net worth of Lessee; (f) the
proposed transferee or its business is subject to compliance with additional
requirements of the law (including related regulations) commonly known as the
"Americans with Disabilities Act" beyond those requirements which are applicable
to the tenant desiring to assign or sublease; or (g) the proposed transferee is
an existing Lessee in the Project, or is an individual or entity with whom
Lessor is, at the time such transfer is proposed, negotiating for the lease of
space in the Project.

         20.3. Conditions. If Lessor elects to consider any proposed assignment
or subletting by Lessee, Lessor may require that, as conditions precedent to
such consideration of any proposed assignment of Lessee's interest in this
Lease, or any subletting of the Premises, (i) at least thirty (30) days prior to
the proposed effective date of any such transfer, Tenant shall provide Landlord
with a statement containing (A) the name and address of the proposed sublessee
or assignee; (B) a financial statement, prepared in accordance with generally
accepted accounting principles, of the proposed assignee or sublessee containing
bank and credit references; and (C) all of the principal terms and conditions of
the proposed assignment or subletting, including, but not limited to, the
commencement and expiration dates, the rent payable, and the precise area of the
Premises subject to such assignment or subletting; (ii) Lessee shall deliver to
Lessor an original assignment or sublease executed by Lessee and the proposed
assignee or sublessee which shall expressly provide (A) for the assumption by
such proposed assignee or subtenant of all of Lessee's obligations under this
Lease; (B) that Lessee shall indemnify and hold Lessor harmless from any and all
claims, obligations and liabilities (including reasonable attorneys' fees)
arising from the use or occupancy by an assignee or sublessee of the Premises;
(C) that Lessee shall further

                                      -22-


<PAGE>

indemnify and hold Lessor harmless from any costs, obligations or liabilities
(including reasonable attorneys' fees) arising from any act or negligence of any
such assignee or sublessee, and from any claim, action or proceeding brought
thereon; (D) that in no event shall Lessee be deemed relieved of any obligation
or liability under this Lease; and (E) that any proposed assignment or
subletting shall not be deemed effective for any purpose unless and until
Lessor's written consent thereto is obtained; and (iii) Lessee shall deliver to
Lessor the sum of $300 as a processing fee to reimburse Lessor for the
administrative costs of reviewing such information. Lessee shall also pay
Lessor, as a condition to any sublease or assignment becoming effective, all
reasonable attorneys' fees and costs incurred in connection with such review,
along with fifty percent (50%) of any consideration received by Lessee in excess
of any consideration payable by Lessee to Lessor under this Lease, as and when
such monies are received by Lessee from its assignee or sublessee, in connection
with such assignment or subletting. Any consideration by Lessor of any
particular proposed assignment or subletting shall not be deemed a waiver by
Lessor of Lessor's absolute right to withhold consent to, or to refuse to
consider, any proposed assignment or subletting.

         20.4. No Waiver. Any consent to any Transfer which may be given by
Lessor, or the acceptance of any rent, charges or other consideration by Lessor
from Lessee or any third party, shall not constitute a waiver by Lessor of the
provisions of this Lease or a release of Lessee from the full performance by it
of the covenants stated herein; and any consent given by Lessor to any Transfer
shall not relieve Lessee (or an transferee of Lessee) from the above
requirements for obtaining the written consent of Lessor to any subsequent
Transfer.

         20.5. Collection. If a default under this Lease should occur while the
Premises or any part of the Premises are assigned, sublet or otherwise
transferred, Lessor, in addition to any other remedies provided for within this
Lease or by law, may at its option collect directly from the transferee all rent
or other consideration coming due to Lessee under the Transfer and apply these
monies against any sums due to Lessor by Lessee; and Lessee authorizes and
directs any transferee to make payments of rent or other consideration direct to
Lessor upon receipt of notice from Lessor. No direct collection by Lessor from
any transferee should be construed to constitute a novation or a release of
Lessee or any guarantor of Lessee from the further performance of its
obligations in connection with this Lease.

21.      BREACH BY LESSEE.
         ----------------

         21.1. Lessee shall be in material breach of this Lease if at any time
during the Lease Term:

                  (a) Lessee fails to make payment of any installment of Base
Monthly Rent, Additional Rent, or of any other rent herein specified to be paid
by Lessee as and when due, or fails to provide reasonable evidence of insurance
or surety bond as required under this Lease, or fails to fulfill any obligation
under this Lease and thereby threatens or endangers life or property, where any
such failure continues for a period of three (3) days following written notice
thereof; or

                                      -23-


<PAGE>

                  (b) Lessee fails to observe or perform any of its other
covenants, agreements or obligations hereunder, and such failure is not cured
within ten (10) days after Lessor's written notice to Lessee of such failure;
provided, however, that if the nature of Lessee's obligation is such that more
than ten (10) days are required for performance, then Lessee shall not be in
breach if Lessee commences performance within such ten (10) day period and
thereafter diligently prosecutes the same to completion; or

                  (c) Lessee becomes insolvent, makes a transfer in fraud of its
creditors, makes a transfer for the benefit of its creditors, voluntarily files
for bankruptcy, is adjudged bankrupt or insolvent in proceedings filed against
Lessee, convenes a meeting of all or a portion of its creditors, or performs any
acts of bankruptcy or insolvency, including the selling of its assets to pay
creditors; or a receiver, trustee, or custodian is appointed for all or
substantially all of Lessee's assets; or

                  (d) Lessee vacates or abandons the Premises; or

                  (e) Any representation or warranty made by Lessee to Lessor in
connection with this transaction is or becomes untrue.

22.      REMEDIES OF LESSOR.
         ------------------

         22.1. Repossession of Premises. Upon any termination of this Lease or
of Lessee's right to possession without termination of the Lease, Lessee shall
surrender possession and vacate the Premises immediately and deliver possession
thereof to Lessor. Lessee hereby grants Lessor the full and free right, whether
by changing or picking locks, if necessary, to enter and repossess the Premises,
with or without process of law. Lessee releases Lessor of any liability for any
damage resulting therefrom and waives any right to claim damage for such
re-entry. Lessee also agrees that Lessor's right to re-lease or any other right
given to Lessor hereunder or by operation of law is not relinquished.

         22.2. Termination of Lease After Breach. If Lessee breaches this Lease
before the end of the Lease Term, or if its right to possession is terminated by
Lessor because of Lessee's breach of this Lease, then this Lease may be
terminated by Lessor at its option, exercised by the giving of ten (10) days
written notice to Lessee. On such termination, Lessor may recover from Lessee,
in addition to any other amounts permitted by law:

                  (a) The worth, at the time of the award, of the unpaid Base
Monthly Rent and Additional Rent which had been earned at the time of
termination of this Lease;

                  (b) The worth, at the time of the award, of the amount by
which the unpaid Base Monthly Rent and Additional Rent which would have been
earned after the date of termination of this Lease until the time of the award
exceeds the amount of the loss of rents that Lessee proves could have been
reasonably avoided;


                                      -24-


<PAGE>

                  (c) The worth, at the time of the award, of the amount by
which the unpaid Base Monthly Rent and Additional Rent for the balance of the
Lease Term after the time of award exceeds the amount of such rental loss for
such period that Lessee proves could be reasonably avoided; and

                  (d) Any other amounts necessary to compensate Lessor for all
detriment proximately caused by Lessee's breach of its obligations under this
Lease, or which in the ordinary course of events would be likely to result
therefrom. The detriment proximately caused by Lessee's breach shall include,
without limitation, (i) expenses for cleaning, repairing or restoring the
Premises, (ii) expenses for altering, remodeling or otherwise improving the
Premises for the purpose of relleting, (iii) brokers' fees and commissions,
advertising costs and other expenses of relleting the Premises, (iv) costs of
carrying the Premises such as taxes, insurance premiums, utilities and security
precautions, (v) expenses in retaking possession of the Premises, (vi)
attorneys' fees and court costs, (vii) any unearned brokerage commissions paid
in connection with the Lease, (viii) parking fees or occupancy taxes due under
the Lease, (ix) reimbursement of any concessions made or paid by Lessor to or
for the benefit of Lessee in consideration of this Lease including, but not
limited to, any moving allowances, contributions or payments by Lessor for
Tenant Improvements or build-out allowances, free or reduced rent, free or
reduced parking, and/or assumptions by Lessor of any of Lessee's previous Lease
obligations.

         22.3. Continuation of Lease After Breach. Notwithstanding the
foregoing, in the event Lessee has breached this Lease and abandoned the
Premises, this Lease, at Lessor's option, shall continue in full force and
effect so long as Lessor does not terminate this Lease, and in such event Lessor
may enforce ail of its rights and remedies hereunder, including, without
limitation, the right to recover rent as it becomes due. In addition, Lessor
shall not be liable in any way whatsoever for its failure or refusal to relet
the Premises. For purposes of this Subparagraph 22.3, the following acts by
Lessor shall not constitute the termination of this Lease:

                  (a) Acts of maintenance or preservation or efforts to relet
the Premises, including, but not limited to, alterations, remodeling,
redecorating, repairs, replacements and/or painting as Lessor shall consider
appropriate for the purpose of attempting to relet the Premises or any part
thereof; or

                  (b) The appointment of a receiver upon the initiative of
Lessor to protect Lessor's interest under this Lease or in the Premises.

         22.4. Bankruptcy. In the event of bankruptcy, Lessee assigns to Lessor
all its rights, title and interest in the Premises as security for its
obligations and covenants set forth in this Lease.


                                      -25-


<PAGE>

         22.5. Definitions and Incidental Rights.

                  (a) "The worth at the time of the award" of the amounts
referred to above in Paragraphs 22.2(a) and 22.2(b), shall be computed by
allowing interest at the rate of ten percent (10%) per annum. "The worth at the
time of the award" of the amount referred to above in 22.2(c) shall be computed
by discounting the amount at the discount rate of the Federal Reserve Bank of
San Francisco in effect at the time of the award, plus one percent (1%).

                  (b) Any efforts by Lessor to mitigate the damages caused by
Lessee's breach of this Lease shall not waive Lessor's right to recover the
damages set forth above.

                  (c) Nothing herein shall be construed to limit, impair or
otherwise affect other provisions of this Lease regarding Lessor's right to
indemnification from Lessee for liability arising prior to the termination of
this Lease for personal injuries or property damage.

                  (d) No right or remedy conferred upon or reserved to Lessor in
this Lease is intended to be exclusive of any other right or remedy granted to
Lessor by statute or common law, and each and every such right and remedy shall
be cumulative.

         22.6. Right to Cure. Lessor may, but shall not be obligated to, cure
any default on the part of Lessee under this Lease (whether or not such default
would entitle Lessor to terminate this Lease), at any time and without notice to
Lessee. Whenever Lessor shall so elect, all costs incurred by Lessor shall be
paid by Lessee to Lessor on demand as Additional Rent.

         22.7. Lessor's Designation. If Lessee shall be in arrears in the
payment of rent, Lessee hereby irrevocably waives any right Lessee may have to
designate the items against which any payments made by or on behalf of Lessee
are to be credited, and Lessor may apply any payments made by or on behalf of
Lessee to such items as Lessor may determine, regardless of and notwithstanding
any designation or request by Lessee as to the items against which any such
payments are to be credited.

23.      SURRENDER.
         ---------

         23.1. At End of Lease Term. At the end of the Lease Term , Lessee shall
surrender the Premises to Lessor, together with all additions, improvements and
other alterations thereto, in broom-clean condition and in good order and repair
except for ordinary wear and tear and damage for which Lessee is not obligated
to make repairs under this Lease. If the Lease Term ends on the Expiration Date
(rather than as a result of an early termination), then not less than thirty
(30) days prior to the end of the Lease Term, Lessee shall remove all additions,
improvements and other alterations made to the Premises by Lessee, repair all
damage to the Premises caused by such removal and restore the Premises to the
condition in

                                      -26-


<PAGE>

which they were prior to the alterations so removed. Notwithstanding the
foregoing, Lessee shall leave in place any and all alterations which Lessor
requests Lessee to leave in place.

         23.2. Requirements. No act or thing done by Lessor or any employee or
other agent of Lessor during the Lease Term shall be deemed to constitute an
acceptance by Lessor of a surrender of all or part of the Premises unless such
an intent is specifically acknowledged in a writing duty signed by Lessor;
without limiting the generality of the foregoing, the delivery of keys to the
Premises to Lessor or any employee or other agent of Lessor shall not constitute
a surrender of the Premises or effect a termination of this Lease, whether or
not the keys are thereafter retained by Lessor.

         23.3. Merger. The voluntary or other surrender of this Lease by Lessee,
or a mutual cancellation thereof will, at the option of Lessor, (i) either
constitute a merger of the leasehold estate into Lessor's interest(s) in the
Project, or not constitute a merger (if no written election is made, no merger
shall occur); and (i) either terminate all or any existing subleases or other
Transfers, or at the option of Lessor, operate as an assignment to it of any or
all of such Transfers.

24.      ATTORNEYS FEES/COLLECTION CHARGES.
         ---------------------------------

         24.1. Proceedings. In the event of any legal action or arbitration
proceeding between the parties hereto, reasonable attorneys' fees and
consultants' fees and expenses of the prevailing party in any such action or
proceeding shall be added to the judgment or award therein, provided, however,
that where a party files multiple causes of action against the other party, or
where there are crossclaims or counterclaims, the court or arbitrator shall
award reasonable attorneys' fees to the prevailing party only to the extent such
fees reflect services performed in connection with those causes of action on
which the prevailing party has prevailed.

         24.2. Collection. If Lessor utilizes the services of any attorney for
the purpose of collecting any rent due and unpaid by Lessee or in connection
with any other breach of this Lease by Lessee, Lessee agrees to pay Lessor
actual attorneys' fees as determined by Lessor for such services, regardless of
the fact that no legal action may be commenced or filed by Lessor.

25.      CONDEMNATION.
         ------------
         25.1. If twenty-five percent (25%) or more of the Premises is taken for
any public or quasi-public purpose by any lawful government power or authority,
by exercise of the right of condemnation, eminent domain or other right of
appropriation, or sold to prevent such taking, Lessee or Lessor may at its
option terminate this Lease as of the effective date thereof. Lessee shall not
because of such taking, assert any claim against Lessor or the taking authority
for any compensation because of such taking, and Lessor shall be entitled to
receive the entire amount of any award without deduction for any estate or
interest of Lessee.

                                      -27-


<PAGE>

If less than twenty-five percent (25%) of the Premises is taken, Lessor at its
option may terminate this Lease. If Lessor does not so elect, Lessor shall
promptly proceed to restore the Premises to substantially its same condition
prior to such partial taking, allowing for any reasonable effects of such
taking, and a proportionate allowance shall be made to Lessee for the Base
Monthly Rent corresponding to the time during which, and to the part of the
Premises which, Lessee is deprived on account of such taking and restoration.

26.      RULES AND REGULATIONS.
         ---------------------

         26.1. Lessee shall faithfully observe and comply with the Rules and
Regulations printed on or attached to this Lease and Lessor reserves the right
to modify and amend them as it deems necessary. Lessor shall not be responsible
to Lessee for the nonperformance by any other lessee or occupant of the Project
of any of said Rules and Regulations, or of any provision of such Lessee's or
occupant's lease.

27.      ESTOPPEL CERTIFICATE.
         --------------------

         27.1. Within ten (10) days following request by Lessor from time to
time, Lessee shall execute and deliver to Lessor a certificate in writing
certifying (i) that this Lease is in full force and effect an unmodified (or if
modified, stating the nature of such modification and identifying the instrument
by which such modification arose); (ii) the amount of the Base Monthly Rent and
Additional Rent payable hereunder and the date to which rent and other charges
are paid in advance, if any; (iii) acknowledging that there are not, to Lessee's
knowledge, any uncured defaults on the part of Lessor hereunder or events or
conditions that with the passage of time, the giving of notice or both would
constitute a default (or specifying such defaults if they are claimed), and (iv)
such other matters concerning this Lease and the Premises as may be requested.
Within ten (10) days following the request of Lessor, Lessee shall also deliver
to Lessor financial statements of Lessee and any guarantor(s) of Lessee,
prepared in accordance with generally accepted accounting principles. Any such
certificate or financial statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises or the Project or any
portion thereof. Lessee's failure to deliver any such certificate or statement
within the required time shall be conclusive upon Lessee that (1) this Lease is
in full force and effect, without modification except as may be represented by
Lessor; (2) there are no uncured defaults in Lessor's performance; and (3) not
more than one (1) month's rent has been paid in advance. Lessee hereby appoints
Lessor as Lessee's attorney-in-fact for the purpose of executing a certificate
on behalf of Lessee setting forth the facts described in the previous sentence
if Lessee fails to deliver such certificate within the required time.

28.      HOLDOVER.
         --------

         28.1. If Lessee remains in the Premises after the Lease Expiration
Date, such continuance of possession by Lessee shall be deemed to be a
month-to-month tenancy at the sufferance of Lessor terminable on thirty (30)
days notice at any time by either party. All

                                      -28-


<PAGE>

provisions of this Lease, except those pertaining to term and rent, shall apply
to the month-to-month tenancy. Lessee shall pay Base Monthly Rent in an amount
equal to one-hundred and fifty percent (150%) of all rents payable for the last
full calendar month of the regular Lease Term.

29.      PROJECT REQUIREMENTS.
         --------------------

         29.1. In the event Lessor requires the Premises for use in conjunction
with another suite or for other reasons connected with the Project planning
program, Lessor, upon notifying Lessee in writing, shall have the right to
relocate Lessee to alternative space in the Project, at Lessor's sole cost and
expense (excluding private telephone systems which Lessee must bear the cost of
moving and installing), and the terms and conditions of this Lease shall remain
in full force and effect excepting that the Premises shall be in a new location
and the Base Monthly Rent and any Additional Rent shall be adjusted as necessary
to reflect any increase or decrease in square footage. However, if such
alternative space does not meet with Lessee's approval, Lessee shall have the
right to cancel this Lease upon giving Lessor thirty (30) days' notice within
ten (10) days of receipt of Lessor's notification of such relocation. If Lessee
fails to give written notice of Lessee's cancellation of this Lease within such
ten (10) day period, Lessee shall be deemed to have approved the alternative
space provided by Lessor. Should Lessee elect to cancel the Lease as provided in
this paragraph, the effective expiration date shall be the projected move-in
date of such alternative space as indicated in Lessor's written notification to
Lessee.

30.      BREACH BY LESSOR/LIMITATION OF LIABILITY.
         ----------------------------------------

         30.1. Lessor's Breach. In the event of any breach by Lessor hereunder,
Lessee shall give notice of such breach and Lessor shall have a reasonable
opportunity to cure the same. A copy of such notice shall be delivered to any
mortgagee or beneficiary under any mortgage or deed of trust encumbering the
Project, and to any groundlessor of the Project, if any such parties request
such notice, and no such notice shall be deemed effective until all such parties
are in receipt thereof.

         30.2. Limitation of Liability. In the event of any actual or alleged
failure, breach or default hereunder by Lessor, Lessee's sole and exclusive
remedy shall be against Lessor's interest in the Project, and no principal,
agent, or representative of Lessor shall be sued, be subject to service of
process, or have a judgment obtained against him in connection with any alleged
breach or default, and no writ of execution shall be levied against the assets
of any such persons. These provisions are for the benefit of, and are
enforceable by Lessor and also without limitation by any partner, shareholder,
director, officer, employee or representative of Lessor, and by their successors
in interest.


                                      -29-


<PAGE>

31.      SUBORDINATION.
         -------------

         31.1. Without the necessity of any additional documents being executed
by Lessee for the purpose of effecting a subordination, and at the election of
Lessor or any mortgagee with a lien on the Project or any groundlessor with
respect to the Project, this Lease shall be subject and subordinate at all times
to (a) all groundleases or underlying leases which may now exist or hereafter be
executed affecting the Project, and (b) the lien of any mortgage or deed of
trust which may now exist or hereafter be executed in any amount for which the
Project, groundleases or underlying leases, or Lessor's interest or estate in
any of said items is specified as security. In the event that any groundlease or
underlying lease terminates for any reason or any mortgage or deed of trust is
foreclosed or a conveyance in lieu of foreclosure is made for any reason, Lessee
will, notwithstanding any subordination, attorn to and become the Lessee of the
successor in interest to Lessor, at the option of such successor in interest.
Lessee covenants and agrees to execute and deliver, upon demand by Lessor and in
the form requested by Lessor any additional documents evidencing the priority or
subordination of this Lease with respect to any such groundlease or underlying
leases or the lien of any such mortgage or deed of trust. Lessee hereby
irrevocably appoints Lessor as attorney-in-fact of Lessee to execute, deliver
and record any such document in the name and on behalf of Lessee.

32.      MISCELLANEOUS PROVISIONS.
         ------------------------

         32.1. Sale by Lessor. In the event of a sale or other conveyance by
Lessor of the Project, including without limitation, a conveyance by trustee's
deed, the same shall operate to release Lessor from any Liability upon any of
the covenants or conditions, expressed or implied, herein contained in favor of
Lessee, and in such event Lessee agrees to look solely to the responsibility of
the successor in interest of Lessor in and to this Lease. This Lease shall not
be affected by any such sale, and Lessee agrees to attorn to the purchaser,
successor or assignee.

         32.2. Notices. All notices, statements, demands, requests, consents,
approvals, authorizations, offers, agreements, appointments, or designations
under this Lease by either party to the other shall be in writing and shall be
considered sufficiently given and served upon the other party if delivered
personally to the attention of a partner or officer of Lessee, if Lessee is not
an individual, or if sent by certified mail, on the third day after mailing,
postage prepaid, return receipt requested, and addressed to the parties'
respective Notice Addresses. Either party may change its Notice Address in the
manner specified herein for the giving of notices. Any notice from Lessor to
Lessee may be signed and delivered by the managing agent of the Project with the
same force and effect as if signed and delivered by Lessor.

         32.3. Waivers. The failure of Lessor to insist in any case upon the
strict performance of any term, covenant or condition of this Lease shall not be
construed as a waiver of a subsequent breach of the same or any other covenant,
term or condition; nor

                                      -30-


<PAGE>

shall any delay or omission by Lessor to seek a remedy for any breach of this
Lease or the acceptance of rent by Lessor, be deemed a waiver by Lessor of its
remedies or rights with respect to such a breach. No waiver by either party
shall be deemed effective unless in writing and signed by the waiving party.
Lessee hereby waives all rights under the provisions of Sections 1932, 1933,
1941 and 1942 of the Civil Code of the State of California, and all rights under
any law in existence during the Lease Term authorizing a tenant to make repairs
at the expense of a landlord or to terminate a lease upon the complete or
partial destruction of the Premises. TO THE EXTENT PERMITTED BY LAW, LESSOR AND
LESSEE EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR OTHER
PROCEEDING, INCLUDING ANY COUNTERCLAIMS, BROUGHT BY EITHER PARTY AGAINST THE
OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE
LEASE, THE RELATIONSHIP OF LESSOR AND LESSEE, OR LESSEE'S OCCUPANCY OR USE OF
THE PREMISES OR PROJECT.

         32.4. Number and Gender. Whenever the singular number is used in this
Lease and when required by the context, the same shall include the plural, and
the masculine gender shall include the feminine and neuter genders, and the word
"person" shall include corporation, firm, partnership, or association. If there
be more than one Lessee, the obligations imposed upon Lessee under this Lease
shall be joint and several.

         32.5. Headings. The headings or titles to paragraphs of this Lease are
not a part of this Lease and shall have no effect upon the construction or
interpretation of any part of this Lease.

         32.6. Modifications. This instrument contains all of the agreements and
conditions made between the parties to this Lease and may not be modified orally
or in any other manner than by an agreement in writing signed by all parties to
this Lease. Lessee acknowledges that neither Lessor nor Lessor's agents have
made any representation or warranty as to the suitability of the Premises to the
conduct of Lessee's business. Any agreements, warranties or representations not
expressly contained herein shall in no way bind either Lessor or Lessee, and
Lessor and Lessee expressly waive all claims for damages by reason of any
statement, representation, warranty, promise or agreement, if any, not expressly
contained in this Lease.

         32.7. Time. Time is of the essence of each term and provision of this
Lease. 

         32.8. Binding Effect. The terms and provisions of this Lease are
binding upon and inure to the benefit of the heirs, executors, administrators,
successors and assigns of Lessor and Lessee.

         32.9. Non-Disclosure. In consideration of Lessor's covenants and
agreements hereunder, Lessee hereby covenants and agrees not to disclose any
terms, covenants or conditions of this Lease to any other party without the
prior written consent of Lessor.

                                      -31-


<PAGE>

         32.10. Consent. If Lessee shall request Lessor's consent and Lessor
shall fail or refuse to give such consent, Lessee shall not be entitled to any
damages for any withholding by Lessor of its consent; Lessee's sole remedy shall
be an action for specific performance or injunction, and such remedy shall be
available only in those cases where Lessor has expressly agreed in writing not
to unreasonably withhold its consent or where as a matter of law Lessor may not
unreasonably withhold its consent.

         32.11. Deposits. Lessor and Lessee hereby agree that Lessor shall be
entitled to immediately endorse and cash Lessee's rent, Lease Documentation Fee,
and the Security Deposit check(s) accompanying this Lease. It is further agreed
and understood that such action shall not guarantee acceptance of this Lease by
Lessor, but, in the event Lessor does not accept this Lease, such deposits
except for the Lease Documentation Fee shall be refunded in full to Lessee. This
Lease shall be effective only after Lessee has received a copy fully executed by
Lessor.

         32.12. Governing Law. This Lease is governed by and construed in
accordance with the Laws of the state in which the Premises are located, and
venue of any suit shall be in the county where the Premises are located.

         32.13. Negotiated Terms. This Lease is a result of negotiations of the
parties, each of which is knowledgeable in commercial leasing matters and each
of which has had the opportunity to be represented by counsel, and at( of the
terms have been agreed to by both Lessor and Lessee after prolonged
negotiations. Accordingly, any rule of law or legal decision that would require
interpretation of any provision of this Lease against the party that has drafted
it is not applicable and is waived. The provisions of this Lease shall be
interpreted in a reasonable manner to effect the purposes of the parties hereto.

         32.14. Severability. If any provision of this Lease is found to be
unenforceable, all other provisions shall remain in full force and effect.

         32.15. Landlord's Lien. LESSOR HEREUNDER SHALL HAVE THE BENEFIT OF, AND
THE RIGHT TO, ANY AND ALL LANDLORD'S LIENS PROVIDED UNDER THE LAW BY WHICH THIS
LEASE IS GOVERNED.

         32.16. Lender Requirements. Lessee hereby consents to amendment of this
Lease as and to the extent required by any lender, provided that no such change
shall increase the rent payable under this Lease or impair Lessee's occupancy or
use of the Premises.

         32.17. Counterparts. This Lease may be executed in one or more
counterpart copies, and each of which, so executed, irrespective of the date of
execution and delivery, shall be deemed to be an original, and all such
counterparts together shall constitute one and the same instrument. The
signature pages of one or more of the counterpart copies may be removed from
such counterpart copies and all be attached to the same copy of this Lease
which, with all signature pages attached, shall be deemed to be an original
Lease.

                                      -32-


<PAGE>

         32.18. No Third-Party Benefits. Except as may be specifically provided
to the contrary, this Lease is solely to establish various rights between
parties to this Lease, and no "third-party" or other person will be entitled to
any rights or benefits from this Lease or to rely on this Lease in any way, nor
may this Lease serve as the basis of any obligation or other liability of a
party to a person who is not a party.

         32.19. Survival. Any obligation of Lessor or Lessee that by its nature
or under the circumstances can only be, or by the provisions of this Lease may
be, performed after the expiration or earlier termination of the Lease Term, and
any liability for a payment or other obligation that shall have accrued or
otherwise relates to any period ending prior to or at the time of expiration or
other termination of the Lease Term, or the end of Lessee's occupancy of the
Premises if later, unless specifically otherwise provided in this Lease, shall
survive the expiration or other termination of this Lease.

         32.20. No Recording. Lessee shall not record this Lease or any short
form or memorandum of this Lease.

         32.21. Expansion. If during the Lease Term, Lessee executes a Lease
within the Project for space larger than the Premises with a lease having a
lease term longer than that which remains on this Lease or one (1) year,
whichever is greater, with a base monthly rent amount at least equal to the Base
Monthly Rent then payable under this Lease, then this Lease shall be terminated
upon the commencement date of the lease for such new space. Notwithstanding the
foregoing, Lessee shall be obligated to pay for any adjustments in rent pursuant
to Paragraphs 3 and 4 hereof, and this obligation shall survive the termination
of this Lease.

         32.22. Commissions. Lessee represents and warrants to Lessor that
Lessee's sole real estate broker in connection with this Lease is
________________________________, and that there are no other persons entitled
to the payment of a commission as a result of Lessee and Lessor entering into
this Lease; and Lessee agrees to indemnify, protect, defend and hold Lessor
harmless from and against any claims for any commissions or other fees arising
out of a claim therefor by any other broker, finder or salesperson.

         32.23. No Partnership. No provision of this Lease and no actions of the
parties hereto shall be construed to create a partnership or joint venture
between Lessor and Lessee, or make either party responsible for the debts and
losses of the other.

33.      SPECIAL PROVISIONS.
         ------------------


         33.1. Special provisions of this Lease number 34 through 35.00 are
attached hereto and made a part hereof. If none, so state in the following
space: .

         IN WITNESS  WHEREOF,  Lessor and Lessee have  executed this Lease as of
the day and year indicated by Lessor's execution date as written below.

                                      -33-


<PAGE>

         Individuals signing on behalf of Lessee warrant that they have the
authority to bind their principals. In the event that Lessee is a corporation,
Lessee shall deliver to Lessor, concurrently with the execution and delivery of
this Lease, a certified copy of corporate resolutions adopted by Lessee
authorizing said corporation to enter into and perform the Lease and authorizing
the execution and delivery of the Lease on behalf of the corporation by the
parties executing and delivering this Lease.

         THIS LEASE, WHETHER OR NOT EXECUTED BY LESSEE, IS SUBJECT TO ACCEPTANCE
AND EXECUTION BY LESSOR, ACTING ITSELF OR BY ITS AGENT ACTING THROUGH ITS SENIOR
VICE PRESIDENT, VICE PRESIDENT OR REGIONAL MANAGER AT ITS HOME OFFICE.


<TABLE>
<CAPTION>

LESSOR                                                      LESSEE
<S>                                                         <C>
KIP PROPERTIES,                                             INTEST CORP., A NEW JERSEY CORP.
a California General Partnership

DBA:     COMMERCE PARK -
SUNNYVALE

By:      R & B Commercial Management
         Company, Inc. (Agent) a California
         corporation

BY /s/ Kevin M. Fitzpatrick                                 BY /s/ Hugh T. Regan, Jr.
   ----------------------------------------                    --------------------------------
         KEVIN M. FITZPATRICK                                  HUGH T. REGAN, JR.
         REGIONAL MANAGER                                      CHIEF FINANCIAL OFFICER

DATE            8/16/96                                     DATE                  8/12/96
    ---------------------------------------                      ------------------------------                      
                  (Execution Date)                                         (Execution Date)

BY_________________________________________                 BY_________________________________

DATE_______________________________________                 DATE______________________________
                  (Execution Date)                                        (Execution Date)
</TABLE>


                                      -34-


<PAGE>

Special Provision 34.

Lessor has instituted an Operations and Maintenance Program ("O&M") directed at
maintaining the Premises in accordance with applicable federal and state
requirements with respect to asbestos-containing materials ("ACM"). ACM exists
in the acoustical ceilings at the Project, and may also exist in the insulation,
fireproofing and floor tiles of the Project. Lessee shall at all times during
the term hereof comply strictly with all rules and regulations promulgated by
Lessor in connection with the concerning O&M and the ACM at the Project,
including without limitation the following:

                  (a) Lessee shall provide its contractors and employees who
work in the Project with such notices concerning ACM as are required by
California's Asbestos Notification Law (Health & Safety Code ss.ss. 25915 et
seq.), and all other federal, state and local laws. Lessee shall comply, and
cause its employees, agents, contractors and invitees to comply, with all laws
and regulations applicable to ACM, including without limitation work practice
and notification regulations in the event of any work or activities which might
disturb the ACM. Lessee shall not permit any such activities to commence or
continue without first notifying and obtaining the prior written consent of
Lessor, which may be withheld in Lessor's sole discretion. If any ACM-related
work is performed by or at the request of Lessee, Lessee shall promptly provide
Lessor with documentation establishing, as to each and every performance of such
work, that the same was performed strictly in accordance with applicable
government standards and with the requirements of this Lease.

                  (b) Lessee shall not take or permit any action which would in
any way damage or disturb any ACM in the Project. Lessee agrees that it shall
not permit any of the ceiling or floor tiles in the Premises to be removed, cut,
drilled or otherwise pierced for any purpose, nor shall any object be permitted
to hang from or come into contact with the ceiling in the Premises. Lessee shall
not undertake any activity which would cause vibration of any ACM, nor shall
Lessee permit any water or other liquid to seep out of the Premises into the
ceiling of any other Tenant in the Project. Lessee shall not permit any repairs
or painting to be performed on or to the floors, insulation, fireproofing or
ceilings in the Premises except to the extent expressly permitted in writing by
Lessor, which permission may be withheld in Lessor's sole discretion if any such
work could have the effect of disturbing any ACM or violating the O&M.

                  (c) Lessee shall notify Lessor immediately in the event Lessee
becomes aware of any violation of the provisions described in Paragraph (b)
above, and/or if any part of the ceiling, floor, fireproofing or insulation
shows signs of any damage, including without limitation, leaking, discoloration,
cracking, dislodged material, shredding or any other damage or wear.

                                      -35-


<PAGE>

Special Provision 35.

Trash Removal shall mean the sum of $31.00 per month, which is in addition to
the monthly rent. Lessor, at its option, can throughout the term of this Lease
adjust the portion of rent applied to trash removal when there is an adjustment
in the fee charged for such removal.




                                      -36-


<PAGE>



                                    EXHIBIT A

                         [Diagram of property location]

                                   EXHIBIT A-1

                        [Diagram of Leased Office Space]

                                    EXHIBIT B

A.       AGREEMENT

A.1      Lessor and Lessee agree to the construction of improvements in the
         Premises according to the terms and conditions of the Lease, EXHIBIT
         "A", and this EXHIBIT "B"

A.2      Lessor will provide Lessee with final detailed plans and specifications
         of all proposed improvements on or before contained herein.

A.3      Lessee will return to Lessor a copy of said final detailed plans and
         specifications EXHIBIT "A1" approved by Lessor on or before August 15,
         1996, subject to the provisions of paragraph D.1 DELAYS of this EXHIBIT
         "B".

A.4      Any changes required by Lessee to final plans and specifications
         previously approved by both Lessor and Lessee, shall be approved by
         Lessor at its sole discretion, subject to the provisions of paragraph
         D.1 of this EXHIBIT "B".

A.5      Lessor will complete all final proposed improvements to the best of its
         ability on or before September 30, 1996 subject to the provisions of
         paragraph D.2 DELAYS of this EXHIBIT "B".

B.       LESSEE PAID IMPROVEMENTS

         None

C.       METHOD OF PAYMENT

C.1      ________________________ are to be paid by Lessee to Lessor subject to
         the provisions of E.3 of this EXHIBIT "B" in the manner stated below:

D.       DELAYS

D.1      Should Lessee not submit approved final plans and specifications to
         Lessor by the date indicated in paragraph A.3 of this EXHIBIT "B",
         Lessor will not be subject to any

                                       -1-


<PAGE>

         liability and the validity of this Lease will not be affected in any
         way. However, Lessor also reserves the right at its sole discretion, to
         terminate this Lease.

D.2      The commencement of rent on the date specified in paragraph 1.6 of this
         Lease will not be postponed or waived and Lessor will not be subject to
         any liability if:

                  (1)      Lessee is the cause of any delay in construction. By
                           way of example, including but not limited to:
                           Lessee's request for a delay; the installation of
                           lessee's trade fixtures and/or equipment; Lessee's
                           request for additional improvements after plans and
                           specifications have been approved as described in
                           paragraph A.3,

                  (2)      Lessor is unable to complete all improvements by the
                           date indicated in A.5 of this EXHIBIT "B" due to
                           circumstances beyond Lessor's reasonable control,
                           including but not limited to: requirements by and
                           governing authority; shortages; strikes; material
                           delivery delays; or acts of God.

E.       ADDITIONAL COSTS

E.1      Any changes required by any governing authority to Lessee approved
         final plans and specifications to conform to local, state or federal
         laws will be at the sole cost of Lessee, in addition to any other
         previously agreed upon improvement costs, if such changes are
         determined to be for the Lessee's special use and not part of the
         general requirements of Lessor to lease space at the Project, in
         accordance with the provisions of paragraph E.3 of this EXHIBIT "B".

E.2      Should any changes to previously approved plans and specifications be
         required by Lessee:

                  (1)      the cost of such revised final plans and
                           specifications shall be at the sole cost of Lessee;

                  (2)      the cost of any changes resulting from such revised
                           plans and specifications shall be at the sole cost
                           and expense of Lessee; and such charges shall be
                           subject to the provisions of paragraphs D and E.3 of
                           this EXHIBIT "B".

E.3      Any additional costs including costs of revised construction drawings,
         incurred as a result of the changes described in paragraphs E.1 and E.2
         above, or if for any other reason the actual costs of improvements
         exceed Lessor's estimated improvement costs, such costs or expenses
         shall be paid by Lessee to Lessor immediately upon receipt by Lessee of
         Lessor's itemized notice.


                                       -2-


<PAGE>

F.       LESSOR'S PAID IMPROVEMENTS

F.1 Lessor at its sole cost will provide the following improvements:

                  (1)      Repair mini-blinds.
                  (2)      Paint warehouse floor. Area to be painted to be
                           cleared by Lessee prior to commencement of work.
                  (3)      Air balance HVAC; re-direct airflow from warehouse to
                           office area if air flow is found to be insufficient
                           to satisfy office requirement.

         All work to be done during normal business hours.

         Should Lessee's scope of work change due to Lessee's request, any
         additional improvements and cost will be at the sole cost of Lessee.

                                       -3-


<PAGE>
                                    EXHIBIT C

                             SUITE ACCEPTANCE LETTER

                  Pursuant to the Lease between the undersigned Lessor and
Lessee dated _______________________, the undersigned Lessee hereby accepts
those certain Premises known as Suite __________________ located in the
_________________________________ Project at
____________________________________________, and acknowledges the following:


                  1. The Premises comprises approximately _____________________
(rentable/usable) square feet.

                  2. Lessee's Proportionate Share is _____________________%.

                  3. Base Monthly Rent shall commence at
_________________________ per month on _______________________________.

                  4. The Commencement Date is _____________________; the Lease
shall expire on ______________________.



LESSOR:

DBA:

By:      R&B Commercial Management
         Company, Inc. (Agent)
         a California corporation


By:_____________________________


Its:____________________________


LESSEE:

                                       -4-


<PAGE>



                                    EXHIBIT D

                     SIGN CRITERIA - COMMERCE PARK SUNNYVALE



This criteria establishes the uniform policies for all Lessee sign
identification within Commerce Park Sunnyvale. This criteria has been
established for the purpose of maintaining the overall appearance of the park.
Conformance will be strictly enforced. Any sign installed that does not conform
to the sign criteria will be brought into conformity at the expense of the
Lessee.

A.       General Requirements:

         1.       A drawing of the size and shape of the approved sign is shown
                  below. All sign costs shall be paid for by Lessee.
         2.       Lessor shall approve all copy and/or logo design prior to the
                  installation of the sign.
         3.       Lessor shall direct the placement of all Lessee signs and the
                  method of attachment to the building.
         4.       Lessee shall be responsible for the fulfillment of all
                  requirements for this criteria.

B.       General Specifications:

         1.       The sign's dimensions shall be 11 1/4" high by 48" wide and
                  the sign shall be of kiln dried redwood, sandblasted
                  technique, painted with the Lessor approved paint standards.
         2.       Lessee shall be allowed one sign regardless of size of
                  occupancy.
         3.       All sign lettering and Lessor approved logo shall be no larger
                  than four inches in height. The color of lettering, border and
                  logo is to be as approved by Lessor. No other color shall be
                  allowed.
         4.       No electrical or audible signs will be allowed.
         5.       Upon removal of any sign, any damage to the building will be
                  repaired by Lessor and at the sole cost of Lessee.
         6.       Except as provided herein. no advertising placards, banners,
                  pennants, names, insignia, trademarks, or other descriptive
                  material shall be affixed or maintained upon any automated
                  machine, glass panes of the building, landscaped areas,
                  streets or parking areas.
         7.       Signs may be purchased through the approved sign manufacturing
                  companies listed below:


                           CAD CRAFTERS 408-970-8777

                                       -5-


<PAGE>

C.       Color Specifications

         1.       Interior and Sides of sign to be Sinclair Paint - Charcoal
                  Color (KX55Y-1-GY36-F5Y-1/5-4732).
         2.       Front Border Trim and letters to be Sinclair Paint - Off White
                  Color (C1Y-H10-J18L21Y-24D).


                                       -6-


<PAGE>



                                    EXHIBIT E

                              RULES AND REGULATIONS


1.       SIGNS/WINDOWS

         All Lessee identification signs shall be approved by Lessor and shall
         be at Lessee's expense. No sign, placard, picture, advertisement, name
         or notice shall be attached to any part of the outside of any Premises
         other than as described in Exhibit "C" of this Lease and if so placed
         Lessor shall have the right to remove any such sign, placard, picture,
         advertisement, name or notice at Lessee's expense.

         Lessee shall not place nor allow anything to be placed near the glass
         of any window, door, partition or wall which may appear unsightly from
         outside the leased Premises, nor conflict with the above.

         Lessor will provide a standard drape, blind or window covering that
         shall not be altered or removed by Lessee.

         Lessee is responsible to keep windows washed, inside and/or out. No
         awning or shade shall be affixed or installed over or in the windows or
         the exterior of the premises.

2.       COMMON AREA/ROOF

         Area used in common by lessees shall be subject to such regulations as
         Lessor may prescribe.

         The sidewalks, entrances and exits, hall passages and stairways, if
         any, shall not be obstructed or used by Lessee for any purpose other
         than for ingress and egress. The hall passages, exits, entrances,
         stairways and roofs are not for the use of the general public and
         Lessor shall in all cases retain the right to control and prevent
         access thereto by all persons whose presence in the judgement of the
         Lessor shall be prejudicial to the safety, character, reputation and
         interests of the premises and lessees, provided that nothing herein
         contained shall be construed to prevent such access to persons with
         whom Lessee normally deals in the ordinary course of Lessee's business
         unless such persons are engaged in illegal activities. Neither Lessee
         nor employees or invitees of Lessee shall go upon the roof of any
         building of the Project.

3.       RESTROOM FACILITIES

         The washrooms and restrooms and appurtenances thereto shall not be used
         for any other use than those for which they were constructed. No
         sweepings, rubbish, rags or

                                       -7-


<PAGE>

         other foreign substances shall be thrown or placed therein. No person
         shall waste water by interfering or tampering with the faucets. Any
         damage in washrooms or restrooms or appurtenances shall be paid for by
         the Lessee who, or whose agents, guests, or employees, shall cause such
         damage.

4.       DAMAGE

         Walls, floors and ceilings shall not be defaced in any way and no one
         shall be permitted to mark, nail, screw or drill into surfaces, paint
         or in any way mar the Project surfaces. Pictures, certificates,
         licenses and similar items normally used in Lessee's Premises may be
         carefully attached to the walls by Lessee in a manner to be prescribed
         by the Lessor. Upon removal of such items by Lessee, any damage to the
         walls or other surfaces shall be repaired by Lessee.

5.       FURNITURE, SAFES/MOVING

         Furniture, freight, equipment, safes or other bulky articles shall be
         moved into or out of the Project only in the manner and at such times
         as Lessor may direct. Lessee shall not overload the floor of the
         Premises or in any way deface the Premises or any part thereof. Lessor
         shall in all cases have the right to determine or limit the weight,
         size and position of all safes and other heavy equipment. Lessor will
         not be responsible for loss or damage to any safe or other property of
         Lessee from any cause. All damage done to the Premises or Project by
         moving or maintaining any such safe or other property shall be repaired
         at the expense of Lessee.

6.       JANITORIAL SERVICE

         Should Lessor provide janitorial services under this Lease, such
         janitorial services shall include ordinary dusting, cleaning and normal
         vacuuming by the janitor assigned to such work and shall not include
         cleaning of carpets, rugs, or moving of furniture or other special
         services. Lessee shall not cause any unnecessary labor by reason of
         Lessee's carelessness or indifference in the preservation of good order
         and cleanliness. Lessor shall not be responsible to Lessee for any loss
         of property from the premises, however occurring or for any damage done
         to the effects of Lessee by the janitor or any other employee.

         Any persons employed by any lessee to do janitorial work shall, while
         in the Project but outside of the Premises, be subject to and under the
         control and direction of the manager of the Project (but not as an
         agent or servant of said manager of the Project), and Lessee shall be
         responsible for all acts of such persons.


                                       -8-


<PAGE>

7.       NUISANCES

         Lessee shall not use, keep or permit to be used or kept, any foul or
         noxious gas or substance in the Premises, or permit or suffer the
         Premises to be occupied or used in a manner offense or objectionable to
         Lessor or other lessees of the Project by reason of noise, odors and/or
         vibrations, or interfere in any way with other lessees or those having
         business therein nor shall any animals or birds be brought in or kept
         in or about the Premises or the Project. Lessee shall maintain the
         leased Premises free from mice, bugs, and ants attracted by food, water
         or storage materials.

8.       USE OF PREMISES

         The leased Premises shall not be used for lodging, sleeping or cooking
         or for any immoral or illegal purpose or for any purpose that will
         damage the Premises or the reputation thereof or for any purpose other
         than that specified in the Lease covering the Premises.

9.       DANGEROUS ARTICLES

         Lessee shall not use or keep in the Premises or common areas any
         kerosene, gasoline or inflammable or combustible fluid or material, or
         any article deemed extra hazardous on account of fire or other
         dangerous properties or use any other method of heating or air
         conditioning other than supplied by Lessor.

10.      WIRING

         No electric wires, or any other electrical apparatus, or additional
         electrical outlets, shall be installed except with written request to
         and written approval from Lessor. Any installation of such wiring shall
         be removed by Lessor at Lessee's expense. Lessor reserves the right to
         enter upon the leased Premises for the purpose of installing additional
         electrical wiring and other utilities for the benefit of the Lessee or
         other lessees.

11.      SECURITY PRECAUTIONS

         All doors of the premises shall be kept closed during normal business
         hours and securely locked after business hours except for normal
         ingress and egress. Lessee must observe strict care and caution that
         all water faucets or any other apparatus is shut off when not in normal
         use and before Lessee's employees leave the Premises, and that all
         electricity, gas, etc. shall likewise be carefully shut off so as to
         prevent waste or damage.


                                       -9-


<PAGE>

12.      IMPROPER CONDUCT

         Lessor reserves the right to exclude or expel from the Project any
         person who in the judgement of the Lessor, is intoxicated or under the
         influence of liquor or drugs or who shall in any manner do any act in
         violation of the Rules and Regulations of said Project.

13.      LESSEE REQUESTS/NOTICES

         Employees of Lessor shall not perform any work for Lessee unless under
         special instruction from Lessor. Lessee shall give Lessor prompt notice
         of any defects in the water, sewage, gas pipes, electrical lights and
         fixtures, heating apparatus, or any other service equipment. No
         employee of Lessor will admit any person other than Lessee to the
         leased Premises without specific written notification by Lessee to
         Lessor.

14.      SOLICITATIONS

         Lessee shall not disturb, solicit or canvass any occupant of the
         Project and shall cooperate to prevent same.

15.      ADVERTISING

         Lessee shall not use the name of the Project in connection with or in
         promoting or advertising the business of Lessee except as a part of
         Lessee's address. Lessor shall have the right to prohibit the use of
         the name of the Project or other publicity by Lessee which in Lessor's
         opinion tends to impair the reputation of the Project or its
         desirability to other lessees. Lessee will refrain from or discontinue
         such publicity upon notification by Lessor.

16.      PARKING

         The parking areas within the Project shall be used solely for the
         parking of passenger vehicles during normal office hours. The parking
         of trucks, trailers, recreational vehicles and campers is specifically
         prohibited. Lessee agrees that vehicles of Lessee or its employees or
         agents shall not park in driveways nor occupy parking spaces or other
         areas reserved for any use such as Visitors, Delivery, Loading, or
         other lessees. No vehicle of any type shall be stored in the parking
         areas at any time. In the event that a vehicle is disabled it shall be
         removed within 48 hours, or if abandoned, Lessor reserves the right to
         remove same at Lessee's expense. There shall be no "For Sale" or other
         advertising signs on or about any parked vehicle. All vehicles shall be
         parked in the designated parking areas in conformation with all signs
         and other markings. In the event that common area parking facilities
         become overburdened, Lessor reserves the right to take whatever steps
         are necessary to relieve such

                                      -10-


<PAGE>


         overburdening. Under no circumstances shall automobiles, trucks or any
         similar vehicles be parked within the Premises.

17.      AUCTION

         No auction, public or private, will be permitted.

18.      KEYS

         Lessee must upon the termination of Lessee's tenancy return to Lessor
         all keys either furnished to or otherwise procured by Lessee. In the
         event of the loss of any keys so furnished, Lessee shall pay to Lessor
         the cost thereof.

19.      EXTERIOR

         Lessee shall not place any improvement or moveable objects including
         antennas, outside furniture, etc. in the parking areas, landscaped area
         or other areas outside of the leased Premises, or on the roof of any
         building of the Project.

         Lessee shall not deposit pallets, crates or other debris outside truck
         doors or along the outside walls of any building or in the driveway
         areas. Lessor may at Lessor's discretion dispose of any such debris as
         Lessor deems necessary.

         All trash is to be deposited in the trash receptacles. Should Lessee
         deposit trash in any area other than those designated, Lessee will be
         charged for its removal.




                                      -11-





<PAGE>
                            DATED 2nd December, 1977





                           MR AND MRS. A. B. ROBERTSON


                                       to


                              ROBERTSON ENGINEERING
                                 (THAME) LIMITED




                                    L E A S E

                                       of


                        Plot 5B Thame Industrial Estate,
                                  Thame, Oxon.







Lightfoot and Lowndes
Thame, Oxon.



<PAGE>



                  This LEASE is made the Second day of December One thousand
nine hundred and seventy seven BETWEEN ALAN BRECK ROBERTSON and MAVIS ROBERTSON
both of 169 Aston Clinton Road Aylesbury in the County of Buckingham
(hereinafter called the "Lessors") of the first part and ROBERTSON ENGINEERING
(THAME) LIMITED whose Registered Office is situate at Lupton Road Thame in the
County of Oxford (hereinafter called "the Lessee") of the second part and
MALCOLM JAMES McLEAN of 10 Rectory Meadow Chinnor in the County of Oxford
(hereinafter called "the Surety") of the third part W I T N E S S E T H as
follows:

                  1. IN consideration of the rent hereby reserved and of the
covenants on the part of the Lessee hereinafter contained the Lessors hereby
demise unto the Lessee ALL THAT the factory Together With the Ladies' and
Gentlemens' toilets and office therein being Plot 5B on the Thame Industrial
Estate Thame in the County of Oxford ALL WHICH said premises are for the purpose
of identification only shown on the plan annexed hereto and thereon edged red
including
 (but without derogating from the generality of the foregoing and the
demise hereby made) all Landlords' fixtures and fittings therein or thereon
including all light and single phase power wiring and heating installations now
installed (which said premises and fixtures and fittings are hereinafter called
"the demised premises") Together With a right of way in common with the Lessors
and all other persons entitled thereto on foot and with or without vehicles at
all times and for all purposes connected with the use of the demised premises
over and along the strip of land seven feet six inches in width shown coloured
green on the said plan TO HOLD the demised premises unto the Lessee from the
Second day of December One thousand nine hundred and seventy seven for a term of
twenty

                                       -2-


<PAGE>

years (hereinafter called "the said term") yielding and paying therefor unto the
Lessors throughout the said term the yearly rent of Six thousand one hundred and
sixty pounds or such greater amount as shall be determined in accordance with
the provisions of Clause 5 hereof and so in proportion for any less part of a
year such rent to be paid without any deduction by equal quarterly payments in
advance on the usual four quarter days in every year the first of such payments
being apportioned from the 2nd day of December One thousand nine hundred and
seventy seven to the Twenty-fifth day of December One thousand nine hundred and
seventy seven to be made on the signing hereof.

                  2. THE Lessee hereby covenants with the Lessors in manner
following that is to say:

                           (1) The Lessee will pay the yearly rent hereinbefore
reserved and made payable at the times and in the manner at and in which the
same is hereby reserved and made payable without any deduction

                           (2) The Lessee will not do or suffer to be done
anything on the demised premises which may render any increased or extra premium
payable for the insurance of the demised premises or the said building or any
neighbouring property of the Lessors against fire or which may make void or
voidable any policy of such insurance and will reimburse the Lessors forthwith
on demand any increased or extra premium which may be payable in respect of the
demised premises or the said building or any such neighbouring property by
reason of any such thing and forthwith on demand from the Lessors or their
insurers cease from doing or suffering to be done that thing which has caused an
increased or extra premium to become payable

                                       -3-


<PAGE>



                           (3) The Lessee will from time to time and at all
times during the said term pay and discharge all rates taxes duties charges
assessments impositions outgoings and obligations whatsoever whether
parliamentary parochial municipal local or of any other description which are
now or may at any time hereafter be assessed charged or imposed upon the demised
premises or any part thereof whether alone or together with any other part of
the said building or upon the owner or occupier in respect thereof and where any
of these are for any reason paid by the Lessors the Lessee will on demand and
from time to time repay to the Lessors the amount so paid

                           (4) The Lessee will pay upon demand the cost of
insuring the premises in accordance with Clause 3 hereof

                           (5) The Lessee will in the fifth year and in every
subsequent fifth year of the said term and also in the last year thereof however
the same may be determined burn off and paint in a proper and workmanlike manner
all outside parts of the demised premises and all additions thereto and all
outbuildings and fences thereof of any nature whatsoever usually painted with
three coats of best oil and white lead paint or such other type of paint as the
Lessors shall previously approve and with every such outside painting will
polish all outside parts of the woodwork previously polished and treat with wood
preservative all outside parts previously or which ought to be so treated and
restore point and make good the brickwork outside cement stucco and stonework
where necessary and paint distemper and restore to its former condition and
appearance all such parts as were previously so treated 

                           (6) The Lessee will in the fifth year and in every
subsequent fifth year of the said term and also in the last year thereof however
the same may be determined

                                       -4-


<PAGE>



burn off where necessary and paint in a proper and workmanlike manner all the
inside wood ironwork and other parts of the demised premises previously and
usually painted and all additions thereto with three coats of best oil and white
lead paint or such other type of paint as the Lessors shall previously approve
and at the same time with every such inside painting will grain varnish paper
distemper whitewash polish and colour such other parts of the inside of the
demised premises as are usually or have been previously so treated

                           (7) The Lessee will at the Lessee's own cost put and
from time to time and at all times during the said term keep in good and
substantial repair and condition and cleanse maintain and amend the whole of the
demised premises including but without prejudice to the generality of the
foregoing the fixtures and fittings therein and the windows window frames
thereof and the walls floors ceilings vaults foundations sewers drains
forecourts pavement lights skylights roofs fences passageways and roads and
other appurtenances with all necessary reparations cleansing and amendments
whatsoever and the demised premises so painted repaired cleansed maintained
amended and kept as aforesaid the Lessee will at the expiration or sooner
determination of the said term quietly yield up unto the Lessors together with
all additions and improvements made thereto in the meantime and all fixtures
(except tenant's and trade fixtures) now in or upon the demised premises or
which during the said term may be affixed or fastened to or upon the same
(excepting such damage by fire or in peacetime by aircraft or articles dropped
therefrom) the reinstatement whereof is covered by the insurance referred to in
Clause 3(l) hereof

                           (8) The Lessee will at all times during the said term
pay the cost of maintaining the roadway over the land shown coloured green and
yellow on the plan annexed

                                       -5-


<PAGE>

hereto and shall indemnify the Lessors in respect of any costs or charges
arising in respect thereof

                           (9) The Lessee will permit the Lessors and all
persons authorised by them respectively at all times during the said term during
reasonable hours in the daytime (upon previous notice in writing) to enter the
demised premises to take inventories of the fixtures and things to be yielded up
at the expiration of the term hereby granted and to view the state of repair and
condition of the demised premises and of all defects and wants of reparation
then and there found and for which the Lessee may be liable under these presents
to give or leave on the demised premises notice in writing to the Lessee and the
Lessee will within the period of two calendar months after such notice or sooner
if requisite repair and make good the same according to such notice and the
covenants in that behalf herein contained and in case the Lessee shall make
default in so doing it shall be lawful for the workmen and others employed by
the Lessors to enter on the demised premises and repair decorate and restore the
same and all expenses incurred thereby shall be paid by the Lessee to the
Lessors forthwith on demand by the Lessors

                           (10) The Lessee will reimburse the Lessors on demand
all fees charges costs and expenses incurred or suffered by the Lessors arising
out of or in connection with or incidental to

                                    (a) Any application or request or proposed
application or request by the Lessee in connection with the demised premises or
any of the provisions of this Lease and whether or not the same shall be
proceeded with by the Lessee or shall be granted or refused or granted subject
to conditions

                                       -6-


<PAGE>

                                    (b) Any breach of any of the covenants on
the part of the Lessee hereunder and any steps taken in contemplation of or in
connection with the preparation and service of a notice under Section 146 or 147
of the Law of Property Act 1925 (as amended) requiring the Lessee to remedy a
breach of any of the covenants herein contained notwithstanding forfeiture for
such breach shall be avoided otherwise than by relief granted by the Court or

                                    (c) Any steps taken in contemplation of and
in connection with the preparation and service of a schedule of dilapidations
during or after the expiry or sooner determination of the said term

                           (11)     (a)     The Lessee will:

                                            (i) not do or suffer or permit to be
done or suffered any act matter or thing on the demised premises or on those
parts of the said building and any yards and ways in respect of which the Lessee
or others have right or use as aforesaid (hereinafter called "the common parts")
which shall or may be illegal immoral noisy noisome noxious dangerous or
offensive or a nuisance damage annoyance or inconvenience to the neighbourhood
or to any public local or other authorities or to the Lessors or to any tenants
or owners or occupiers of the said building or any part thereof or any
neighbouring premises or which shall be in any way injurious to the same

                                            (ii) not commit any wilful or
voluntary waste spoil or destruction in or upon the demised premises

                                            (iii) not allow any sale by auction
to be held on the demised premises

                                       -7-


<PAGE>

                                            (iv) not overload any of the floors
or walls of the demised premises

                                            (v) provide all necessary dustbins
and keep the same in clean sanitary and good condition with the lids firmly on

                                    (b) If the Lessors shall abate any nuisance
which the Lessee is responsible to abate the Lessee will pay all costs charges
and expenses incurred in abating such nuisance and executing all such works as
may be necessary for abating such nuisance whether or not required in obedience
to a notice served by any local or other authority or by any other person
entitled to abate a nuisance

                           (12) (a) The Lessee will at the Lessee's own expense
do and execute all such works and things and comply with all such requirements
as under or by virtue of any existing or future Act of Parliament statutory
instrument bye-law regulation order direction or permission already passed made
or granted or hereafter to be passed made or granted (and any conditions
attaching thereto) and for the time being in force are or may be directed to be
done to the demised premises whether by the owner or occupier thereof and
whether directed by any government local sanitary gas electricity or water
supply authority or otherwise howsoever including requirements to be complied
with in respect of the user from time to time being made of the demised premises
or for the benefit of the persons employed in or about the demised premises or
in respect of any alteration or addition to the demised premises and will at all
times indemnify and keep indemnified the Lessors against any breach
non-performance or non-observance thereof and repay to the Lessors on demand any
costs charges or expenses which may be incurred by the Lessors in respect of any
such works or

                                       -8-


<PAGE>

requirements Provided Always that if any acts things or works are required to be
done or carried out in order to comply with this covenant the previous written
approval of the Lessors to such work shall be obtained by the Lessee

                                    (b) The Lessee will produce to the Lessors
or the Lessors' Surveyor upon demand all such evidence as the Lessors may
require in order to be satisfied that the provisions of this subclause (12) have
been complied with

                           (13) The Lessee will not without the previous
approval of the Lessors in writing place or suffer to be placed on the exterior
of the demised premises any sign placard poster advertisement plate notice flag
banner or wireless or television mast or aerial or other thing and the Lessee
will if it is a condition (inter alia) of such approval on the part of the
Lessors as aforesaid comply with any directions given by the Lessors for
insurance in connection therewith or reimburse the Lessors upon demand being
made any additional premium payable by the Lessors therefor and the Lessee will
not hand place or deposit or permit to be hung placed or deposited any goods
articles or things for display sale or otherwise outside the demised premises or
on any forecourt adjoining the demised premises or the said building without the
written approval of the Lessors

                           (14) The Lessee will use the demised premises only as
a factory workshop or warehouse and for no other purposes whatsoever

                           (15) (a) The Lessee will not without the previous
consent in writing of the Lessor at any time during the said term put up erect
make or maintain or suffer to be put up erected made or maintained on the
demised premises or any part thereof any new building structure or erection or
in any way annex the demised premises or any part

                                       -9-


<PAGE>



thereof to any premises adjoining or make or permit or suffer to be made any
change alteration addition or excavation whatsoever in or to the demised
premises or the buildings at the time erected thereon or on any part thereof or
in the design elevation or appearance of the demised premises

                                    (b) In the event of any breach of this
subclause (15)(a) then in addition to any other rights and powers available the
Lessors shall be at liberty to remove restore or fill up as the case may be all
such unauthorised buildings erections improvements changes alterations additions
or excavations as may then and there be found and the cost of carrying out such
work including any Solicitors' and Surveyors' fees incurred shall be repaid to
the Lessors by the Lessee forthwith on demand

                           (16) The Lessee will not assign transfer charge
underlet or part with the possession or occupation of the whole or any part or
parts of the premises without the consent of the Lessors such consent not to be
unreasonably withheld any assignee entering into a direct covenant with the
Lessors to observe and perform the provisions of this Lease

                           (17) The Lessee will permit the Lessor and his agents
at any time in the case of a proposed sale of the demised premises or of the
said building subject to and with the benefit of this Lease or in the case of a
proposed letting at any time within six calendar months before the end of the
said term or during any holding over to enter the demised premises and to affix
upon any suitable part thereof but so as not to obscure the windows of the
demised premises a notice board for selling or letting the same (with or without
any other premises) as the case may be and the Lessee will not remove or obscure
the same and will at all times throughout the said term permit all prospective
purchasers or

                                      -10-


<PAGE>



tenants by order in writing of the Lessors or their Agents to view the demised
premises at reasonable hours in the daytime without interruption

                           (18) The Lessee acknowledges that no warranty is
given or implied by the granting of these presents by the Lessors or otherwise
that the use to which the Lessee proposes now or hereafter to put the demised
premises nor any alterations or additions which the Lessee may now or hereafter
desire to carry out will not require planning permission under planning law and
the Lessee hereby further covenants to indemnify and keep indemnified the Lessor
against any costs claims actions proceedings compensation demands or charges
which may arise directly or indirectly under planning law in respect of the
demised premises

                           (19) If the Lessee shall make default in effecting
payment to the Lessors forthwith on demand of any moneys becoming payable by the
Lessee to the Lessors pursuant to any of the Lessee's covenants hereinbefore
contained (other than pursuant to subclause (1) of this Clause) the amount owing
may be recovered by the Lessors as liquidated damages together with interest
thereon at a rate which shall be the equivalent of one pound per centum above
the Bank of England's minimum lending rate for the time being in force (as well
after as before any judgement) calculated from the date of demand until actual
payment thereof by the Lessee

                           (20) The Lessee will not allow any encroachment to be
made or easement acquired under on or over the demised premises and in
particular will not allow the right of access of light from or over the demised
premises to any neighbouring property to be acquired (unless the Lessors shall
have expressly consented thereto in writing) and if (in the


                                      -11-


<PAGE>

absence of such consent) any encroachment or easement shall be made or
threatened to be made or if any window or opening shall be opened made or
threatened to be opened or made in any neighbouring property which if not
obstructed might by lapse of time confer the right to such access of light on
the owner of any neighbouring property will forthwith give notice thereof to the
Lessors and permit the Lessors and their servants to enter upon the demised
premises to inspect the same and will if so requested by the Lessors at their
cost do all such things as may be proper for the purpose of preventing the
making of such encroachment or the acquisition of such easement or right
including where necessary the making and maintaining of a hoarding for the
purpose of preventing the access of light to such window or opening and further
if the Lessee shall omit or neglect to do all such things as aforesaid at the
earliest possible time it shall be lawful for the Lessors their servants and
workmen to enter upon the demised premises and to do the same

                           (21)     The Lessee will immediately upon receipt of

                                    (a) a proposal for alteration of the
Valuation List under the Local Government Act 1948 (or any amendment or
re-enactment thereof for the time being in force) in respect of the demised
premises

                                    (b) any notice or communication from any
local authority or other body or authority indicating the intention compulsorily
to acquire any interest in the demised premises or any part thereof or the said
building or

                                    (c) any notice or proposal beneficially or
detrimentally affecting the demised premises send a copy of such proposal notice
or communication to the

                                      -12-


<PAGE>

Lessors and will if so requested by the Lessors joint with the Lessors in
opposing any such alteration of valuation or compulsory acquisition or
detrimental proposal

                           (22) The Lessee will in all respects comply with all
the provisions of the Factory Town and Country Planning and Public Health Acts
the Clean Air Act 1956 and the Rivers (Prevention of Pollution) Act 1951

                           (23) The Lessee will take such measures as may be
necessary to ensure that any effluent discharged into the drains and sewers
which belong to or are used by the demised premises in common with other
premises will not be corrosive or in any way harmful to the said drains or
sewers or cause any obstruction or deposit therein and will not discharge or
allow to be discharged any solid matter from the demised premises into the
drains or sewers as aforesaid

                           (24) The Lessee will not without the consent in
writing of the Lessors suspend any weight from the roof or roof trusses or use
the roof trusses of any building part of the demised premises for the storage of
goods or place or permit or suffer to be placed any weight thereon or permit any
person or persons to enter thereon save with a view to the execution of
necessary repairs and then only in such manner as to subject the roof and roof
trusses to the least possible strain

                           (25) The Lessee will not at any time during the said
term cause any obstruction in such parts of the estate as are used by the Lessee
in common with the Lessors or any other person similarly entitled and in
particular but without prejudice to the generality of the foregoing provision in
relation to the right of access as aforesaid provided that any

                                      -13-


<PAGE>

obstruction caused for the purposes of loading or unloading shall not be deemed
to be a breach of this sub-clause

                           (26) The Lessee will not cause any detriment to the
amenity of any dwelling in the locality by reason of noise vibration smell fumes
smoke soot as dust or grit and will as long as the road coloured brown on the
said plan remains a private road not allow vehicles belonging to them or used by
any person in their employ to be parked or left unoccupied on any part of the
road coloured brown

                  3. THE Lessors hereby covenant with the Lessee that the
Lessors will at all times during the said term (unless such insurance shall be
vitiated by any act neglect default or omission of the Lessee) insure the
demised premises and keep insured the windows and glass lights of the demised
premises against the usual risks of destruction and damage in the full value
thereof and the demised premises against loss damage by fire and in peacetime by
aircraft and articles dropped therefrom in the full reinstatement cost with some
insurance office or offices of reputed or at Lloyd's and the Lessors will
punctually pay all premiums for effecting and maintaining such insurance and
will produce such policies and the last premium receipts for inspection by the
Lessee whenever reasonably required and the Lessors will apply all money
received under the respective policies in reinstatement of such plate glass or
lights and in the case of destruction or damage by fire or in peacetime by
aircraft or articles dropped therefrom to the demised premises the Lessors will
as soon as practicable cause all money received in respect of such insurance
(other than in respect of rent and fees) to be forthwith laid out in reinstating
the demised premises

                  4. PROVIDED Always and it is hereby agreed and declared as
follows:

                                      -14-


<PAGE>

                           (1) That the provisions of Section 196 of the Law of
Property Act 1925 as amended by the Recorded Delivery Service Act 1962 shall
apply to any notice under this Lease

                           (2) That the Lessee paying the rent hereby reserved
and performing the several covenants conditions and agreements herein contained
and on the part of the Lessee to be performed and observed shall and may
peaceably and quietly hold and enjoy the demised premises during the said term
without any lawful interruption or disturbance from or by the Lessors or any
person or persons lawfully claiming under or in trust for the Lessors

                           (3) That if and whenever the rent hereby reserved or
any part thereof shall be in arrear for twenty one days after the same shall
have become due (whether any legal demand therefor shall have been made or not)
or if and whenever the Lessee shall fail or neglect to perform or observe any of
the covenants conditions or agreements herein contained and on the part of the
Lessee to be performed or observed or if the Lessee or any one or more of them
(being individuals) shall become bankrupt or if the Lessee or any one or more of
them for the time being shall enter into an arrangement or composition for the
benefit of the Lessee's creditors or shall suffer any distress or execution to
be levied on the Lessee's goods or (being a Limited Company) shall go into
liquidation whether compulsory or voluntary (save for the purpose of
reconstruction or amalgamation of a solvent company) or have a Receiver
appointed or its undertaking then and in any of the said cases it shall be
lawful for the Lessors at any time thereafter and notwithstanding the waiver of
any previous right of re-entry to re-enter into and upon the demised premises or
any part thereof in the name of the whole and thereupon the said term shall
absolutely cease and determine but


                                      -15-


<PAGE>

without prejudice to any rights or remedies which may then have accrued to
either party against the other in respect of any antecedent breach of any of the
covenants herein contained

                           (4) That in case the demised premises or any part
thereof shall at any time be destroyed or so damaged by fire or in peacetime by
aircraft or articles dropped therefrom or by any other insured risk as to be
unfit for occupation or use then and in any such case (unless the insurance of
the demised premises shall have been vitiated by the act neglect default or
omission of the Lessee or either of them or unless the destruction or damage
shall be outside the cover given by the insurance which by Clause 3(l) hereof
the Lessors covenant to maintain) the rent hereby reserved or a fair and just
proportion thereof according to the nature and extent of the damage sustained
(the amount of such proportion to be determined by the Surveyor of the Lessors
whose decision shall be final and binding) shall be suspended and cease to be
payable until the demised premises shall have been reinstated

                  5.       (1) THE Lessors may from time to time give notice in
writing to the Lessee in accordance with the provisions of this Clause requiring
the rent payable hereunder to be reviewed

                           (2) Such a notice may be given at any time not more
than twelve nor less than six months before the commencement of each or any of
the following years of the said term that is to say the fourth eighth twelfth
and sixteenth years thereof but not at any other time and from and after the
giving of any such notice the following provisions of this Clause shall take
effect for the purpose of reviewing the rent payable hereunder in accordance
with such notice and in such provisions the expression "the material date" shall
be construed as meaning the end of the year of the said term during which such
notice is given

                                      -16-


<PAGE>



                           (3) If the Lessors and the Lessee shall reach
agreement as to the amount of the increased rent such agreement shall be reduced
to writing and a memorandum thereof endorsed on these presents

                           (4) If such agreement is not reached within eight
weeks of the service of such notice the Lessors may make written application to
the President for the time being of the Royal Institution of Chartered Surveyors
to appoint a valuer to certify in writing (as an expert and not as an
arbitrator) what in his opinion is the full yearly rack rent of the premises
comprised in and demised by this Lease on the basis hereinafter mentioned and
the Lessors and the Lessee respectively will if required furnish such valuer
with all such facilities for inspection and with all such other information and
facilities as the valuer may reasonably require

                           (5) The full yearly rack rent is that which would be
obtainable as from the material date if this Lease were not then subsisting upon
a letting with vacant possession of the demised premises for the then residue of
the term hereby granted and on the basis that the Lessee would be obliged to
perform and observe the covenants and conditions on the part of the Lessee
herein covenanted to be performed and observed by the Lessee and disregarding
the value of any goodwill attaching to any part of the demised premises by
reason of any trade or business carried on thereon

                           (6) If the full yearly rack rent so agreed or
certified by the said valuer shall be greater than the rent hereinbefore
reserved and payable immediately before the material date then as from the
material date this Lease shall have effect as if the yearly rent so agreed or
certified were the rent reserved by Clause 1 hereof but if the full yearly

                                      -17-


<PAGE>

rack rent so agreed or certified is the same as or less than the yearly rent
hereby reserved and payable immediately before the material date the yearly rent
hereby reserved shall be unchanged

                           (7) The certificate of the said valuer shall be final
and binding on the Lessors and the Lessee respectively and each party shall bear
its own costs in respect of the foregoing matters and a moiety of the fees of
the said valuer

                  6.       (1) THE expression "the Lessors" shall where the
context so admits include the reversioner for the time being expectant on the
determination of the term hereby granted

                           (2) The expression "the demised premises" shall where
the context so admits include the appurtenances thereof and any other building
at any time erected thereon and all additions and alterations from time to time
during the term hereby granted made thereto and all landlords' fixtures and
fittings from time to time therein and thereon

                           (3) The expression "the neighbouring property" shall
where the context so admits include any land or buildings thereon (whether
already or hereafter to be erected) which are capable of enjoying any of the
easements rights or other privileges over the demised premises which are in
these presents conferred thereon or reserved in respect thereof whether or not
such land or buildings now or hereafter belong to the Lessors or any other
person and whether the same are contiguous adjoining adjacent opposite or near
to the demised premises

                                      -18-


<PAGE>



                           (4) The expression "the said term" shall where the
context so admits include not only the term hereby granted but also the period
of any holding over or of any extension thereof whether by statute or at common
law.

                  7. THE surety in consideration of the demise hereinbefore
contained having been made at his request hereby covenants with the Lessors that
the Lessee will pay the rent hereby reserved on the days and in manner aforesaid
and will perform and observe all the Lessee's covenants hereinbefore contained
and that in case of default in such payment of rent or in the performance or
observance of such covenants as aforesaid the surety will pay and make good to
the Lessors on demand all losses damages costs and expenses thereby arising or
incurred by the Lessors PROVIDED ALWAYS and it is hereby agreed that any neglect
or forbearance of the Lessors in endeavouring to obtain payment of the rent
hereby reserved when the same becomes payable or to enforce performance of the
several stipulations herein on the Lessee's part contained and any time which
may be given to the tenant by the Lessors shall not release or exonerate or in
any way affect the liability of the surety under this covenant PROVIDED FURTHER
that in the event of an assignment of the whole of the premises demised by this
Lease the Lessors will upon production of satisfactory references accept an
alternative Surety in lieu of the said Malcolm James McLean and shall if
required execute an appropriate Deed acknowledging the extinguishment of any
obligations on his part under the terms of this Lease.

                                      -19-


<PAGE>

IN WITNESS whereof the Lessors and Surety have set their hands and seals and the
Lessee has caused its Common Seal to be hereunto affixed the day and year first
before written.


SIGNED SEALED and DELIVERED by     )
ALAN BRECK ROBERTSON in the        )        /s/ A.B. Robertson
                                            -----------------------------------
presence of:                       )


/s/ Witness
- -----------------------------------
Solicitor, Thame, Oxford

SIGNED SEALED and DELIVERED by     )
MAVIS ROBERTSON in the presence of:)        /s/ M. Robertson
                                            -----------------------------------
                                   )

/s/ Witness
- -----------------------------------
Solicitor, Thame, Oxford

                                      -20-


<PAGE>

BY THIS MEMORANDUM dated the 28th day of January 1986 it is desired to record
that it has been agreed that the rent payable under a Lease dated 2nd December
1977 and made between Alan Breck Robertson and Mavis Robertson (1) and Robertson
Engineering (Thame) Limited (2) and Malcolm James McLean (3) shall from 25th
December 1985 be the yearly sum of Fifteen Thousand Five Hundred Pounds
((pound)l5,500.00)

The Lease is now vested in Intest Limited



                                              Signed /s/ A.B. Robertson
                                                     --------------------------
                                                       (A. B. Robertson)


                                              Signed /s/ M. Robertson
                                                     --------------------------
                                                       (M. Robertson)

                                      -21-


<PAGE>


                                                     ADDENDUM

                  At a meeting held between the lessors and lessees at 54/55
                  Rabans Close, Aylesbury, Bucks on Friday, 24th July, 1981, it
                  was unanimously agreed as follows:

                  That:

                  for the avoidance of any doubt, and to achieve the original
                  intentions of both parties at the date on which the lease was
                  signed, the notice of variation of rent under clause 5 of the
                  lease dated 2nd day of December 1977 between Mr. A.B.
                  Robertson Mrs. M. Robertson of the one part and Robertson
                  Engineering (Thame) Ltd. of the other part shall be varied as
                  follows:

                  Notice of proposed  rent  increase  shall be given between the
                  following dates:

                  lst January and 30th June 1981 
                  lst January and 30th June 1985
                  lst January and 30th June 1989 
                  lst January and 30th June 1993

                  and that any agreed revised rentals be payable on and from the
                  following dates:

                  25th December 1981
                  25th December 1985
                  25th December 1989
                  25th December 1993

                  It was further agreed that this notice shall be affixed to and
                  be deemed to form part of the aforementioned lease and that
                  the failure of the lessor to give notice of an intended rent
                  increase as from 25th December 1981 within the stipulated
                  period be ignored for this rent increase period only.

Signed by:                                    Signed for:
                                              Robertson Engineering (Thame) Ltd.

/s/ A.B. Robertson                            /s/ M.J. McLean
Alan Breck Robertson                          M.J. McLean,
                                              Chairman

/s/ M. Robertson                              /s/ A.S. Chidgey
Mrs. Mavis Robertson                          A.S. Chidgey,
                                              Secretary

in the presence of:

Name:  /s/ D.W.
Address:  National Westminster Bank Limited
                                                                 24th July 1981
Occupation:  Bank Official

                                      -22-




<PAGE>

DATED                              28th January                            1986
- --------------------------------------------------------------------------------




                          CITYCROWN ENGINEERING LIMITED

                                     - and -

                                 INTEST LIMITED











                                   ASSIGNMENT

                                     - of -

                                 5B Lupton Road,
                                     Thame,
                                  Oxfordshire.









                             A.H. DUNCOMBE & COMPANY
                                      Thame


<PAGE>



DATE:                              28th January                            1986

1.       In this Assignment

         1.1      the Assignor is CITYCROWN ENGINEERING LIMITED whose registered
                  office is at 16 Kempson Close Aylesbury Buckinghamshire;

         1.2      the Assignee is INTEST LIMITED whose registered office is at
                  180 Fleet Street, London ENA 2NT;

         1.3      the Lease is a lease dated 2nd December, 1977 between Alan
                  Breck Robertson and Mavis Robertson, the Assignor and Malcolm
                  James McLean;

         1.4      the Property is 5B Lupton Road, Thame, Oxfordshire more fully
                  described in and demised by the Lease.

2.       The Assignor as beneficial owner assigns the Property to the Assignee
         for the residue of the term of the Lease subject to the rent reserved
         by and the covenants and conditions contained in the Lease.

3.       The covenants implied in this deed by virtue of the Assignor assigning
         as beneficial owner shall not extend to the breach of any covenant of
         the Lease in respect of the actual state and condition of the Property
         at today's date.

4.       The Assignee covenants with the Assignor by way of indemnity only to
         pay the rent reserved by and to perform and observe
 the tenant's
         covenants contained in the Lease and to indemnify the Assignor against
         any liability resulting from the non-payment of the rent or the breach
         or non-observance of the tenant's covenants.

                                       -1-


<PAGE>


5.       It is hereby certified that the transaction hereby effected does not
         form part of a larger transaction or of a series of transactions for
         which the consideration or aggregate consideration exceeds
         (pound)30,000.00.


THE COMMON SEAL OF CITYCROWN     )
ENGINEERING LIMITED              )                         [Seal]
attested by                      )






                                                Director           /s/ Director




                                                Secretary         /s/ Secretary




THE COMMON SEAL OF INTEST        )
LIMITED attested by              )                         [Seal]







                                     Director           /s/ Hugh T. Regan





                                     Secretary         /s/ Patricia L. Hazleton


                                       -2-




<PAGE>

                                                                    Exhibit 10.6

                                TENANCY AGREEMENT


                AN AGREEMENT made on the 18th day of April, 1996


                                     between


                         ALAMBON TOOLS PRIVATE LIMITED,

          (hereinafter called "the Landlord" which expression shall
          where the context so admits include his successors in title).

          A private company incorporated with limited liability in the
          Republic of Singapore and having its registered office at 89
          Short Street #08-01 Golden Wall Centre Singapore 188216.


                                       and

                                 InTEST PTE LTD,

          (hereinafter called "the Tenant" which expression shall where
          the context so admits include its successors in title and
          permitted assigns).

          A private company incorporated with limited liability in the
          Republic of Singapore and having its registered office at 1
          North Bridge Road #20-01 High Street Centre Singapore 179094.



<PAGE>

                  WHEREBY IT IS AGREED as follows:

Demise:

                  1.   The Landlord agrees to let and the Tenant agrees to take
all that the premises known as Block 203B Henderson Industrial Park #03-05
Singapore 159548 (hereinafter called "the said premises") together with the
Landlord's fittings and set forth in the Inventory annexed hereto TO HOLD the
same unto the Tenant for the term of FORTY EIGHT (48) months commencing from the
8th day of April, 1996 and expiring on the 7th
 day of April, 2000 inclusive of
both these dates (hereinafter called "the said term") together with the right
for the Tenant and others duly authorized by the Tenant to use in common with
the Landlord and all others so authorized by the Landlord and all other persons
entitled thereto the entrance halls, staircase landings, lobbies, passages,
lifts, car parks, service road and the recreational and other facilities in the
complex in which the said premises are comprised (hereinafter referred to as
"the Complex"). YIELDING AND PAYING THEREFORE the monthly rent of Singapore
Dollars SIX THOUSAND FOUR HUNDRED SIXTY ONE AND CENTS SEVENTY only (S$6,461.70)
of which S$5991.70 is for the premises and S$470.00 is for the maintenance
charges. The agreed rental of S$6,461.70 is to be paid monthly in advance on or
before the 8th day of each month.

Deposit:

                  2.   On or before the signing of this agreement, the Tenant
shall advance a deposit with the Landlord the sum of Singapore Dollars NINETEEN
THOUSAND THREE HUNDRED AND EIGHTY FIVE AND CENTS TEN ONLY (S$19,385.10) being
the equivalent to THREE (3) month's rent by way of a deposit or security for the
due

                                       -2-


<PAGE>

performance and observance by the Tenant of all and singular the several
covenants conditions and stipulations on the part of the Tenant herein contained
which deposit shall be refunded free of interest to the Tenant upon expiry or
earlier termination of the tenancy.

                  3.   The Tenant HEREBY COVENANTS with the Landlord as follows:

                       (a)  Rental. To pay the said monthly rent at the time 
and in the manner aforesaid without any deduction whatsoever.

                       (b)  PUB Charges. To pay the charges and taxes for the 
supply of water, electricity, gas and/or any other appliances hired from the
Public Utilities Board and any water borne sewerage system and other charges
payable to the Public Utilities Board and or other competent authority in
respect of the said premises. 

                       (c)  TAS Charges. To pay all charges and taxes in
respect of the telephone installed on the said premises. 

                       (d)  Tenantable Repairs. At all times to keep the 
interior of the said premises and the effects thereof in good and tenantable
repair and condition (fair wear and tear and damage by the fire tempest,
earthquake, flood, explosion and any Act of God or cause not attributed to the
neglect or default of the Tenant excepted) at any time during or at the
expiration or sooner termination of the said term. 

                       (e)  Rules and Regulations. To comply with all the rules
and regulations and any other condition imposed by the Management Corporation
for the use of the common facilities and to pay the Landlord for any costs that
may be incurred as a result of the breach of the said rules, regulations and
conditions by the Tenant.

                                       -3-


<PAGE>
                       (f)  Access to Premises. To permit the Landlord and his 
duly authorized agents, workmen and others appointed by him upon reasonable
notice and at all reasonable times of the day during the said term free access
to the said premises to execute any work of renewal, cleaning, alteration or
repair to the said premises. 

                       (g)  Nuisance. Not to do or suffer to be done on the
said premises or any part thereof any act matter or things whatsoever which
maybe or become a nuisance or may cause disturbance to the owners, tenants or
occupiers of any adjacent or neighboring premises. 

                       (h)  Illegal Purpose. Not to use or permit or suffer the 
said premises or any part thereof to be used for any illegal or immoral purpose
and to use only as a factory cum office. 

                       (i)  Renovations. No permit to be made for any partition 
or alteration to the said premises or to the Landlord's fixtures, fittings and
decorations therein without prior written consent from the Landlord whose
consent shall not be unreasonably withheld. 

                       (j)  Subletting. Not to assign, sublet or otherwise part
with possession of the said premises without prior written consent of the
Landlord whose consent shall not be unreasonably withheld. Provided always that
the Tenant shall not be in breach of this covenant if the said premises shall be
occupied by any employee or member of its staff and any person duly authorized
by the tenant. 

                       (k)  Viewing. During the four (4) weeks immediately 
receding the expiry or earlier termination of the said term in accordance with
the provisions herein

                                       -4-


<PAGE>

contained to permit persons with written authority from the Landlord or the
Landlord's agent upon reasonable notice and at reasonable times to view the said
premises for the purpose of sale or taking a tenancy thereof.

                       (l)  Yield Up Premises. To deliver up vacant possession 
of the premises together with the effects thereto at the expiration or sooner
termination of the said term in good and tenantable repair and condition (fair,
wear and tear and damage by fire tempest, flood, explosion, strike, riot, civil
commotion and any Act of God or cause not attributable to the neglect or default
of the Tenant excepted). 

                       (m)  Stamp Duty and Costs. To pay the stamp duty on this
Agreement and the duplicate. 

                       (n)  Termination. Notwithstanding the provisions of
Clause 1 of this Agreement, the Tenant may terminate this Agreement on giving
the Landlord not less than TWO (2) months notice in writing. 

                  4.   The Landlord HEREBY COVENANTS with the Tenant as follows:

                       (a)  Taxes, etc. To pay all rates assessments and 
outgoing in respect of the said premises and any increases thereof. 

                       (b)  Premises. To deliver the said premises and the 
effects in good order and condition at the commencement of the Agreement.
Building features specifications as follows: 

                       Area:                     3077 sq. ft. 
                       Floor (loading max.):     250 to 450 lbs/sq. ft. 
                       Cargo Lifts (loading):    5 tons each (6 lifts)

                                       -5-


<PAGE>

The Landlord hereby warrants and undertakes that the said premises have been
duly approved by the Relevant Authorities for use as a factory cum office.

                       (c)  Insurance. To insure and keep insured the said 
premises against loss or damage by fire, storm, tempest, strike, riot, civil
commotion, Act of God and such other risks as the Landlord shall deem desirable
or expedient and in case of destruction of or damage to the said premises or
part thereof from any cause by such insurance as to make the same unfit for
habitation and use to lay out all monies received in respect of such insurance
in rebuilding and reinstating the same as soon as is reasonably practicable. 

                       (d)  Quiet Enjoyment. That the Tenant paying the rent 
hereby reserved and observing and performing the several covenants conditions
and stipulations on the part of the tenant herein contained shall peaceably hold
and enjoy the said premises throughout the said term without interruption from
Landlord or any person rightfully claiming under or in trust for the Landlord.

                       (e)  Good Conditions. To keep in good structural repair 
and condition the ceiling, walls, floors, wirings, pipes, wires, sanitary and
water apparatus in or about the said premises. With regard to the common
entrance, hall, lifts, staircase and passages leading to the said premises the
Landlord shall upon any request by the Tenant make representations to the
Management Corporation of the complex in which the said premises are situated or
such other competent authority for the time being appointed in respect of any
matter or complaint which the Tenant may have. 

                       (f)  Repairs. Subject to Clause 3 (f) to execute and pay
for all repairs or maintenance of the said premises and effects and so far as 
such work may be done

                                       -6-


<PAGE>

by the Tenant the costs thereof recoverable as a debt due from the Landlord to
the Tenant and be forthwith payable by the Landlord to the Tenant on demand.

                  5.   PROVIDED ALWAYS and it is hereby agreed and declared as
follows:

                       (a)  Fire. In case the said premises or any part thereof
shall at any time during the said term be so damaged or destroyed by fire,
earthquake, lighting, storm, tempest, strike, riot, civil commotion or any Act
of God or cause not attributable to the neglect or default to the Tenant to be
unfit for habitation and then the rent hereby reserved shall be suspended until
the said premises shall again be rendered fit for habitation and use. Any
dispute with reference to this provision referred to arbitration in accordance
with the Arbitration Act (Chapter 10). 

                       (b)  Notice of Termination in the Event of Fire. 
Notwithstanding the provisions of the preceding sub-clause either party may in
the event of the said premises being destroyed or damaged as mentioned in the
sub-clause by at liberty by notice in writing to determine the tenancy hereby
created shall absolutely cease and determine and the deposit to determine and
the deposit paid to the Landlord under clause 2 hereof and any rent paid advance
shall be refunded to the Tenant forthwith without demand but without prejudice
to any right of action which the parties may have against each other in respect
of any antecedent breach of this Agreement by either of the parties. 

                       (c)  Option to Renew. The Landlord will on the written 
request of the Tenant made not less than two (2) months before the expiration of
the term hereby created and if there shall at the time of such request be no
existing breach or non-observance

                                       -7-


<PAGE>

of any of the conditions and provisions on the part of the Tenant herein before
contained at the expense of the Tenant grant to the Tenant a tenancy of the said
premises for further term of TWENTY FOUR (24) months from expiration of the said
term at a rental to be agreed upon by both parties and containing the like
conditions and provisions as are herein contained except this clause for
renewal. In the event that both parties cannot agree on the new rental for the
further term of twenty four (24) months, then there shall be no extension of the
tenancy herein and each party shall have no claim against the other party save
for antecedent rights.

                       (d)  Right to Terminate. The Tenant shall have the right
to terminate the tenancy by giving the Landlord TWO (2) months' notice in
writing or TWO (2) months' rent in lieu of such notice PROVIDED after the first
FORTY EIGHT (48) months of the term hereby created. 

                       (e)  Notice. Any notice required to be given or served 
by the Landlord or the Tenant shall be in writing and shall sufficiently be
given or served if posted by registered post to the respective addresses
hereinabove stated or to the last known address of the party concerned and shall
be deemed to be received when it would have been delivered in the ordinary
course of post.

                                       -8-


<PAGE>

                  IN WITNESS HEREOF the parties hereto have hereunto set their
Common Seal the day and year first above written.

                       Dated this 18th day of April, 1996.


The Common Seal of:                                  }
                                                     }
ALAMBON TOOLS PRIVATE LIMITED                        }
                                                     }
is hereunto affixed                                  }

in the presence of:


/s/ A. Subramanian       /s/ S. Sivagami
- -----------------------------------------

The Common Seal of:                                  }
                                                     }
InTEST PRIVATE LIMITED                               }
                                                     }
is hereunto affixed                                  }

in the presence of:

          /s/ Cornelis Hol
- -----------------------------------------

                                       -9-




<PAGE>

                               inTEST CORPORATION

                                 ---------------

                              AGREEMENT OF EXCHANGE

                                 ---------------


         AGREEMENT made as of April 4, 1997 between Alyn R. Holt ("Stockholder")
and inTEST Corporation, a Delaware, USA corporation ("Delaware inTEST").

                                    RECITALS

         Stockholder owns 16,500 shares of S$1.00 (the "Subsidiary Stock") in 
the issued share capital of inTEST Pte. Ltd. (the "Subsidiary").

         Approximately 79% of the shares comprising the total issued share
capital of the Subsidiary is owned by inTEST Corp., a New Jersey, USA
corporation ("New Jersey inTEST").

         New Jersey inTEST proposes to change its domicile from the State of New
Jersey, USA to the State of Delaware, USA pursuant to a merger of New Jersey
inTEST with and into Delaware inTEST.

         Sometime after the merger, Delaware inTEST proposes to offer to the
public (the "Public Offering") shares of the common stock, par value $.01 per
share, of Delaware inTEST (the "Common Stock") pursuant to an S-1 Registration
Statement and related Prospectus (the "Registration Statement").

         Prior to the Public Offering, Delaware inTEST proposes to declare and
pay a stock dividend on all of the issued and outstanding shares of Common
Stock.

            Delaware inTEST intends to structure the Public Offering so that
each of its stockholders will be able to participate in the
 Public Offering and
sell a portion of his shares of the Common Stock on a pro rata basis. However,
no assurance can be given at this time by Delaware inTEST that the stockholders
will be able to participate in the Public Offering.

         To accomplish the reorganization, recapitalization and Public Offering
proposed by Delaware inTEST, it is necessary that Delaware inTEST acquire the
stock of the Subsidiary owned by Stockholder, and Stockholder desires to
exchange his shares of the Subsidiary Stock under the terms and provisions of
this Agreement.

         NOW, THEREFORE, the parties hereto, in consideration of the mutual
promises herein contained, and intending to be legally bound hereby, agree as
follows:




<PAGE>



1.     Exchange of Stock

         (a) Number of Shares. Immediately prior to the consummation of the
Public Offering, Stockholder shall transfer and deliver to Delaware inTEST all
of the shares of the Subsidiary owned by Stockholder, and in exchange therefor,
Delaware inTEST shall issue and deliver to Stockholder (or his agent) 7,221
shares of the Common Stock. For the purposes of this Agreement, the phrase
"consummation of the Public Offering" shall mean the completion of the sale of
the Common Stock to the underwriter of the Public Offering in accordance with
the Registration Statement.

         (b) Adjustment to Number of Shares. If Delaware inTEST shall, after the
date of this Agreement, (i) pay a dividend or make a distribution on its Common
Stock in shares of Common Stock, (ii) subdivide the outstanding shares of Common
Stock into a larger number of shares, (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, or (iv) issue by reclassification
of its Common Stock any shares of capital stock of Delaware inTEST, the number
of shares of Common Stock to be delivered to Stockholder pursuant to this
Agreement shall be adjusted so that Stockholder shall be entitled to receive the
number of shares of Common Stock which Stockholder would have received
immediately after such action mentioned above had the exchange contemplated by
this Agreement had happened immediately prior to such action.

2.     Closing

         The closing under this Agreement (the "Closing") and the exchange of
the Subsidiary Stock for the Common Stock shall take place at the time, date and
place of the consummation of the Public Offering or at such other time, date or
place as the parties shall mutually agree.

3.     Representations and Warranties of Delaware inTEST

         Delaware inTEST represents and warrants to Stockholder as follows, and
all of such representations and warranties shall be true and correct at and as
of the time of the Closing as though then made and shall survive the Closing:

         (a) Organization. Delaware inTEST is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with corporate power to own its properties and to carry on its business as
presently conducted.

         (b) Authorization. The execution and delivery of this Agreement on
behalf of Delaware inTEST and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action,
and this Agreement constitutes the legal, valid and binding obligation of
Delaware inTEST, enforceable in accordance with its terms.


                                       -2-


<PAGE>



         (c) Shares of the Common Stock. The shares of Common Stock deliverable
to Stockholder pursuant to this Agreement, when delivered, will be duly
authorized, validly issued, fully paid and non-assessable.

         (d) Conflicts. Neither the execution and delivery of this Agreement nor
compliance with the terms and conditions of this Agreement by Delaware inTEST
will breach or conflict with any of the terms, conditions or provisions of the
Certificate of Incorporation or By-Laws of Delaware inTEST or of any agreement
or instrument to which Delaware inTEST is a party or by which Delaware inTEST is
or may be bound, or constitute default thereunder or result in a termination of
any such agreement or instrument.

4.     Representations and Warranties of Stockholder

         Stockholder represents and warrants to Delaware inTEST as follows, and
all of such representations and warranties shall be true and correct at and as
of the time of the Closing as though then made and shall survive the Closing:

         (a) Ownership and Authority to Transfer Subsidiary Stock. Stockholder
holds of record and is the lawful beneficial owner of the Subsidiary Stock free
and clear of any pledge, lien, encumbrance, equity, voting trust, security
interest or claim of any kind or character, and of any rights in third persons
to purchase any of the Subsidiary Stock. Stockholder has full legal right, power
and authority to sell, transfer and deliver the shares of the Subsidiary Stock
to Delaware inTEST and to enter into this Agreement and perform or be subject to
each of the agreements and obligations undertaken by Stockholder in this
Agreement, or documents contemplated hereby, without need for any consent,
approval, authorization, license or order of any court or governmental agency or
body. The delivery of certificates for the shares of the Subsidiary Stock duly
endorsed will transfer valid title to Delaware inTEST, free and clear of all
pledges, liens, encumbrances, equities, voting trusts, security interests and
claims of any kind or character.

         (b) No Conflict. Neither the execution and delivery of this Agreement
nor compliance with the terms and conditions of this Agreement by Stockholder
will breach, terminate, violate or conflict with and will not with the giving of
notice or the passage of time constitute grounds for a default, violation or
termination of any of the terms, conditions or provisions of any agreement,
license, franchise or instrument of any kind or any provision of law or any
judicial or administrative order, award, judgment or decree to which Stockholder
is a party or by which Stockholder is or may be bound. This Agreement
constitutes the legal, valid and binding agreement of Stockholder, enforceable
in accordance with its terms.

         (c) Registration Statement. Stockholder has carefully read the most
recent draft (April 1, 1997) of the Registration Statement available prior to
the date of this Agreement and acknowledges that he has been given the
opportunity by Delaware inTEST to ask questions and receive additional documents
and information with respect to the exchange

                                       -3-


<PAGE>



contemplated by this Agreement, the Public Offering and Delaware inTEST.
Stockholder is acquiring the shares of the Common Stock without being furnished
any sales literature or prospectus other than the said draft of the Registration
Statement.

         (d) Investment Intent. Other than any shares of the Common Stock to be
sold by or on behalf of Stockholder as part of the Public Offering, Stockholder
is acquiring the shares of the Common Stock pursuant hereto solely for his own
account for investment purposes and not with a view to resale or distribution,
and Stockholder has no present intention of selling or distributing said shares.
Stockholder is aware that there may be legal and practical limits on
Stockholder's ability to sell or dispose of the Common Stock.

         (e) Risk. Stockholder recognizes that an investment in the Common Stock
involves certain risks, and Stockholder has taken full cognizance of and
understands all of the risk factors related to the acquisition of the Common
Stock, including those set forth under the caption "Risk Factors" in the
Registration Statement.

         (f) Registration Exemption. Stockholder understands that the Common
Stock is being issued to Stockholder in reliance on specific exemptions from the
registration requirements of federal and state laws and that Delaware inTEST is
relying on the truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings set forth in this Agreement.

5.     Securities Laws

         (a) No Registration. Stockholder acknowledges that the exchange of the
Subsidiary Stock for shares of the Common Stock has not been registered under
the Securities Act of 1933, as amended (the "Act"), or any applicable state
securities law by reason of exemptions from the registration requirements of the
Act and such laws, and may not be sold, pledged, assigned or otherwise disposed
of in the absence of an effective registration statement for the Common Stock
under the Act or unless an exemption from such registration is available.
Delaware inTEST is under no obligation to, and has no intention to, register
(except in connection with the Public Offering) the Common Stock or comply with
any exemption from registration so as to permit any resale and has not
represented that at some future date an attempt will be made to register the
Common Stock or to comply with an exemption from registration so as to permit
any resale.

         (b) Resale of Common Stock. Except for the Public Offering, Stockholder
will not attempt to sell, transfer, assign, pledge or otherwise dispose of all
or any portion of the Common Stock in the absence of either an effective
registration statement or an opinion of reputable securities counsel
satisfactory in form and substance to Delaware inTEST and its counsel that such
proposed sale, transfer, assignment, pledge or other disposition would not be in
violation of the Act.


                                       -4-


<PAGE>



         (c) Restrictive Legend. Stockholder agrees that Delaware inTEST may
place upon each certificate for the shares of Common Stock delivered to
Stockholder a legend stating that said shares have not been registered under the
provisions of the Act and were issued in a transaction not involving a public
offering under an investment representation.

6.     Conditions Precedent to Stockholder's Obligations

         All of the obligations of Stockholder to consummate the transaction
contemplated by this Agreement are subject to the fulfillment, at or prior to
the Closing, of each of the following conditions:

         (a) Representations and Warranties. All representations and warranties
of Delaware inTEST contained in this Agreement shall be true and correct at and
as of the time of the Closing as though made at and as of such time (except that
such representations and warranties may reflect the consummation of any
transactions contemplated by this Agreement); and Delaware inTEST shall have
performed and complied with all of its obligations under this Agreement which
are to be performed and complied with by it prior to or at the time of the
Closing.

         (b) Stock Certificates of inTEST. Delaware inTEST shall have delivered
to Stockholder (or his agent) a certificate or certificates representing the
shares of Common Stock to which Stockholder is entitled hereunder registered in
the name of Stockholder.

7.     Conditions Precedent to inTEST's Obligations

         All of the obligations of Delaware inTEST to consummate the transaction
contemplated by this Agreement are subject to the fulfillment, at or prior to
the Closing, of each of the following conditions:

         (a) Representations True at Closing. All representations and warranties
of Stockholder contained herein shall be true and correct at and as of the time
of the Closing as though made at and as of such time (except that such
representations and warranties may reflect the consummation of any transactions
contemplated by this Agreement); and Stockholder shall have performed and
complied with all of his obligations under this Agreement which are to be
performed and complied with by him prior to or at the time of the Closing.

         (b) Delivery of Shares. Stockholder shall have delivered to Delaware
inTEST certificates representing all of the shares of the Subsidiary Stock
accompanied by a separate instrument of transfer duly executed by Stockholder in
favor of Delaware inTEST, free and clear of all liens, claims, liabilities,
security interests, charges, restrictions or encumbrances of any nature
whatsoever.


                                       -5-


<PAGE>



8.     Indemnity by Delaware inTEST

         Delaware inTEST hereby indemnifies Stockholder against and holds
Stockholder harmless of and from any and all demands, claims, losses, expenses,
damages, deficiencies and liabilities (including reasonable attorneys' fees and
other costs and expenses of any suit, action or proceeding) resulting at any
time after the date of this Agreement by reason of any misrepresentation, breach
of warranty or non-fulfillment of any covenant or agreement on the part of
Delaware inTEST contained in this Agreement.

9.     Indemnity by Stockholder

         Stockholder hereby indemnifies Delaware inTEST against and holds
Delaware inTEST harmless of and from any and all demands, claims, losses,
expenses, damages, deficiencies and liabilities (including reasonable attorneys'
fees and other costs and expenses of any suit, action or proceeding) resulting
at any time after the date of this Agreement by reason of any misrepresentation,
breach of warranty or non-fulfillment of any covenant or agreement on the part
of Stockholder contained in this Agreement.

10.     Termination

         The exchange of Subsidiary Stock and Common Stock contemplated by this
Agreement and the obligations of the parties hereto under this Agreement are
subject to the consummation of the Public Offering. If the Public Offering is
not consummated, for any reason, on or before August 31, 1997, either party may
terminate this Agreement, without liability, by giving the other party written
notice of such termination.

11.     General

         (a) Further Assurances. The parties hereto shall execute and deliver
any and all papers and documents and take any and all actions which may be
necessary or appropriate to carry out the terms of this Agreement.

         (b) Waiver of Conditions. Any party hereto may waive any condition
provided in this Agreement for his or its benefit.

         (c) Governing Laws. This Agreement shall be governed, construed and
enforced in accordance with the substantive laws of the State of Delaware.

         (d) Entire Agreement. This Agreement contains the entire agreement
between the parties hereto with respect to the subject matter hereof, and there
are no agreements, representations or warranties which are not set forth herein.
All prior negotiations, agreements and understandings are superseded hereby.


                                       -6-


<PAGE>


         (e) Amendment. This Agreement may not be amended or revised except by a
writing signed by the parties hereto.

         (f) Headings. The section and paragraphs headings of this Agreement are
for convenience only, form no part of this Agreement, and shall not affect its
interpretation.

         (g) Binding Effect. The terms and conditions of this Agreement shall be
binding upon the successors, assigns, heirs, distributees, administrators,
executors and legal representatives of the parties hereto.

         (h) Equitable Relief. The parties hereto acknowledge that the exchange
of shares contemplated by this Agreement is unique, and that any violation of
this Agreement cannot be compensated for in damages alone. Therefore, in
addition to all of the other remedies which may be available under applicable
law, either party hereto shall have the right to equitable relief including,
without limitation, the right to enforce specifically the terms of this
Agreement by obtaining injunctive relief against any violation or
non-performance hereof.

         (i) Litigation. Any action or claim at law or equity arising under or
related to this Agreement shall be brought only in the Chancery Court of the
State of Delaware or in the United States District Court for the Eastern
District of Pennsylvania, and the parties hereto hereby consent to personal
jurisdiction and venue in said courts.

         (j) Construction of Agreement. In the case any provision of this
Agreement shall for any reason be held to be invalid, illegal or unenforceable,
such holding shall not affect the validity, legality or enforceability of the
remaining provisions of this Agreement which shall be construed as if such
invalid, illegal or unenforceable provision had never been included herein.

         (k) Stamp Duty. The Stamp Duty on the instrument of transfer relating
to the Subsidiary Stock shall be paid by Stockholder.

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day and year first above written.

                                        inTEST CORPORATION


                                        By: /s/ Alyn R. Holt
                                           -----------------------------
                                                Chairman

Witness:                                Stockholder

/s/ James W. Schwartz                   /s/ Alyn R. Holt
- ---------------------------             ------------------------------

                                       -7-




<PAGE>

                               inTEST CORPORATION
                                 1997 STOCK PLAN

                                    ARTICLE I
                                  ESTABLISHMENT

         1.1 Purpose. The inTEST Corporation 1997 Stock Plan (the "Plan") is
hereby established by inTEST Corporation (the "Company"). The purpose of the
Plan is to promote the overall financial objectives of the Company and its
stockholders by motivating those persons selected to participate in the Plan to
achieve long-term growth in the equity of the Company and by retaining the
association of those individuals who are instrumental in achieving this growth.
The Plan provides additional incentives to officers and other key employees,
consultants and members of the Board of Directors of the Company or its
Affiliates, as defined herein (respectively, "Key Employees," "Consultants" and
"Directors"), to enter into or remain in the service or employ of the Company or
its Affiliates and to devote themselves to the Company's success by granting
such individuals an opportunity to acquire or increase their proprietary
interest in the Company through receipt of (i) rights (the "Options") to acquire
the Company's Common Stock, par value $.01 per share (the "Common Stock"), and
(ii) awards of shares of the Common Stock ("Stock Awards").

         1.2 Two-Part Plan. The Plan shall be divided into
 two sub-plans: the
"Key Employee Plan," which will govern benefits for Key Employees, as defined
herein, and the "Non-Qualified Plan," which will govern benefits to Directors
and Consultants. All provisions hereunder which refer to the "Plan" shall apply
to each of the Key Employee Plan and the Non-Qualified Plan.

                                   ARTICLE II
                              STOCK SUBJECT TO PLAN

         2.1 Aggregate Maximum Number. The aggregate maximum number of shares of
the Common Stock for which Options or Stock Awards may be granted under the
Plan, including without limitation, the Key Employee Plan, is 500,000 shares
(the "Plan Shares"), which number is subject to adjustment as provided in
Section 7.6. Plan Shares shall be issued from authorized and unissued Common
Stock or Common Stock held in or hereafter acquired for the treasury of the
Company. If any outstanding Option granted under the Plan expires, lapses or is
terminated for any reason, the Plan Shares allocable to the unexercised portion
of such Option may again be the subject of an Option or Stock Award granted
pursuant to the Plan.

                                   ARTICLE III
                                  TERM OF PLAN

         3.1 Term of Plan. The Plan shall commence on the date of approval of
the Plan by the Board of Directors of the Company ("Effective Date"), but shall
terminate unless the Plan is approved by the stockholders of the Company within
twelve months of such date as set forth in Section 422(b)(1) of the Internal
Revenue Code of 1986, as amended (the "Code"). Any Options granted pursuant to
the Plan prior to approval of the Plan by the stockholders of the Company shall
be subject to such approval and, notwithstanding anything to the contrary herein



<PAGE>



or in any Option Document (as defined below), shall not be exercisable until
such approval is obtained. No Option may be granted under the Plan on or after
the date which is ten years after the Effective Date.

                                   ARTICLE IV
                                   ELIGIBILITY

         4.1      Eligibility.

                  (a) Key Employee Plan. Except as herein provided, the persons
who shall be eligible to participate in the Key Employee Plan and be granted
awards of Options or Stock Awards ("Benefits") shall be those persons who are
Key Employees who shall be in a position, in the opinion of the Committee, as
defined herein, to make contributions to the growth, management, protection and
success of the Company and its Affiliates. Of those persons described in the
preceding sentence, the Administrator, as herein defined, may, from time to
time, select persons to be granted Benefits and shall determine the terms and
conditions with respect thereto. In making any such selection and in determining
the form of the benefit, the Administrator may give consideration to the
person's functions and responsibilities, the person's contributions to the
Company and its Affiliates, the value of the individual's service to the Company
and its Affiliates and such other factors deemed relevant by the Administrator.
The term "Affiliates" shall mean any corporation or other business organization
in which the Company owns, directly or indirectly, 50 percent or more of the
voting stock or capital at the time of the granting of the Option or Stock
Award.

                  (b) Non-Qualified Plan. NQSOs, as defined herein, and Stock
Awards may be granted to Directors and Consultants pursuant to the Non-Qualified
Plan as herein provided.

                                    ARTICLE V
                                  STOCK OPTIONS

         5.1 Key Employee Plan Options. Options granted under the Key Employee
Plan may be either ISOs, as defined herein, or NQSOs. Each Option granted under
the Key Employee Plan is intended to be an incentive stock option ("ISO") within
the meaning of Section 422(b) of the Code for federal income tax purposes,
except to the extent (i) any such ISO grant would exceed the limitation of
subsection 5.3(a) below, (ii) any Option is specifically designated at the time
of grant (the "Grant Date") as not being an ISO (an Option which is not an ISO,
and therefore is a non-qualified option, is referred to herein as an "NQSO"), or
(iii) any Option is granted to a person who is not an employee of the Company on
the Grant Date. Under the Key Employee Plan, Options may be granted to Key
Employees at such times, in such amounts, and on such terms and conditions as
determined by the Administrator, in accordance with the terms of the Plan.



                                       -2-


<PAGE>



         5.2      Non-Qualified Plan Options.

                  Options granted under the Non-Qualified Plan shall be NQSOs.
Such Options may be granted to Directors and Consultants at such times, in such
amounts, and on such terms and conditions as determined by the Administrator in
accordance with the terms of the Plan ("Non-Employee Options").

         5.3 Terms and Conditions of Options. Options granted pursuant to the
Plan shall be evidenced by written documents ("Option Documents") in such form
as the Administrator shall from time to time approve, subject to the following
terms and conditions. Option Documents may also contain such other terms and
conditions (including vesting schedules for the exercisability of Options) which
the Administrator shall from time to time provide which are not inconsistent
with the terms of the Plan. Persons to whom Options are granted are hereinafter
referred to as "Optionees."

                  (a) Number of Option Shares. Each Option Document shall state
the number of shares of Common Stock ("Option Shares") to which it pertains. If
the aggregate fair market value of Option Shares with respect to which ISOs are
exercisable for the first time by an Optionee during any calendar year
(determined as of the date the ISO is granted) and any options granted under
other incentive stock option plans of the Company exceed $100,000, the portion
of such options in excess of $100,000 shall be treated as options which are not
ISOs in accordance with Section 422(d) of the Code.

                  (b) Option Price. Each Option Document shall state the price
at which an Option Share may be purchased (the "Option Price"), which, in the
case of an ISO shall be 100% of the "Fair Market Value" of a share of the Common
Stock on the Grant Date. If the Common Stock is listed on a national securities
exchange or quoted on The Nasdaq Stock Market ("NASDAQ"), the Fair Market Value
is the closing price of the Common Stock on the relevant date (or, if such date
is not a business day or a day on which quotations are reported, then on the
immediately preceding date on which quotations were reported), as reported by
the principal national exchange on which such shares are traded (in the case of
an exchange) or by NASDAQ, as the case may be. If the Common Stock is not listed
on a national securities exchange or quoted on NASDAQ, the Fair Market Value
will be as determined by the Administrator in good faith. If an ISO is granted
to an Optionee who then owns, directly or by attribution under Section 424(d) of
the Code, shares possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company, then the Option Price shall
be One Hundred and Ten Percent (110%) of the Fair Market Value of an Option
Share on the Grant Date.

                  (c) Medium of Payment. An Optionee shall pay for Options
Shares (i) in cash, (ii) by bank check payable to the order of the Company or
(iii) by such other mode of payment as the Administrator may approve, including
payment through a broker in accordance with procedures permitted by Regulation T
of the Federal Reserve Board. Furthermore, the Administrator may provide in an
Option Document that payment may be made in whole or in part in shares of the
Common Stock held by the Optionee for more than one year. If payment is made in
whole or in part in shares of the Common Stock, then the Optionee shall deliver
to

                                       -3-


<PAGE>



the Company certificates registered in the name of such Optionee representing
shares of Common Stock legally and beneficially owned by such Optionee, free of
all liens, claims and encumbrances of every kind and having a fair market value
on the date of delivery of such notice that is not less than the Option Price of
the Option Shares with respect to which such Option is to be exercised,
accompanied by stock powers duly endorsed in blank by the record holder of the
shares represented by such certificates. If certificates for shares of the
Company's Common Stock delivered to the Company represent a number of shares in
excess ("Excess Shares") of the number of shares required to make payment for
the Option Price of the Option Shares (or the relevant portion thereof) with
respect to which such Option is to be exercised by payment in shares of Common
Stock, the stock certificate issued to the Optionee shall represent the total of
the Option Shares in respect of which payment is so made plus such Excess
Shares. Notwithstanding the foregoing, the Board of Directors, in its sole
discretion, may refuse to accept shares of Common Stock in payment of the Option
Price. In that event, any certificates representing shares of Common Stock which
were delivered to the Company shall be returned to the Optionee with notice of
the refusal of the Board of Directors to accept such shares in payment of the
Option Price. The Board of Directors may impose such limitations or prohibitions
on the use of shares of the Common Stock to exercise an Option as it deems
appropriate, subject to the provisions of the Plan.

                  (d) Initial Exercise. The Administrator shall determine the
time at which an Option may first be exercised.

                  (e) Termination of Options. All Options shall expire at such
time as the Administrator may determine and set forth in the Option Document,
which date shall not be later than the last business date immediately preceding
the tenth anniversary of the Grant Date of such Option (the "Expiration Date").
No Option may be exercised later than the Expiration Date. Notwithstanding the
foregoing, no Option shall be exercisable after the first to occur of the
following:

                           (i) In the case of an ISO, five years from the Grant
Date if, on such date the Optionee owns, directly or by attribution under
Section 424(d) of the Code, shares possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company;

                           (ii) The date set by the Board of Directors of the
Company to be an accelerated expiration date after a finding by the Board of
Directors of the Company that a change in the financial accounting treatment for
Options from that in effect on the date the Plan was adopted materially
adversely affects or, in the determination of such Board of Directors, may
materially adversely affect in the foreseeable future, the Company, provided
such Board of Directors may take whatever other action, including acceleration
of any exercise provisions, it deems necessary should it make the determination
referred to hereinabove;

                           (iii) Expiration of one year (or such shorter period
as the Administrator may select and set forth in the Option Document) from the
date the Optionee's employment or

                                       -4-


<PAGE>



service with the Company terminates for any reason other than circumstances
described by Subsection (e)(v), below;

                           (iv) In the event of a "Change in Control" (as
defined in Subsection (f) below), the Administrator can (A) accelerate the
Expiration Date of any Option which has vested provided an Optionee who holds an
Option is given written notice at least thirty (30) days before the date so
fixed, or (B) terminate any Option which has not then vested; or

                           (v) In the case of an Option granted under the Key
Employee Plan, a finding by the Committee, after full consideration of the facts
presented on behalf of both the Company and the Optionee, that the Optionee has
been discharged from employment with the Company for Cause. For purposes of this
Section, "Cause" shall mean: (A) a breach by Optionee of his employment
agreement with the Company, (B) a breach of Optionee's duty of loyalty to the
Company, including without limitation any act of dishonesty, embezzlement or
fraud with respect to the Company, (C) the commission by Optionee of a felony, a
crime involving moral turpitude or other act causing material harm to the
Company's standing and reputation, (D) Optionee's continued failure to perform
his duties to the Company or (E) unauthorized disclosure by Optionee of trade
secrets or other confidential information belonging to the Company. In the event
of a finding that the Optionee has been discharged for Cause, in addition to
immediate termination of the Option, the Optionee shall automatically forfeit
all Option Shares for which the Company has not yet delivered the share
certificates upon refund of the Option Price.

                  (f) Change of Control. In the event of a Change in Control (as
defined below), the Administrator may take whatever action with respect to the
Options outstanding under the Plan it deems necessary or desirable, including,
without limitation, accelerating the Expiration Date in the respective Option
Documents to a date no earlier than thirty (30) days after notice of such
acceleration is given to the Optionee or terminate any Option which has not then
vested. A "Change of Control" shall be deemed to have occurred upon the earliest
to occur of the following events:

                           (i) The date the stockholders of the Company (or the
Board of Directors, if stockholder action is not required) approve a plan or
other arrangement pursuant to which the Company will be dissolved or liquidated;

                           (ii) the date the stockholders of the Company (or the
Board of Directors, if stockholder action is not required) approve a definitive
agreement to sell or otherwise dispose of all or substantially all of the assets
of the Company;

                           (iii) the date the stockholders of the Company (or
the Board of Directors, if stockholder action is not required) and the
stockholders of the other constituent corporation (or its board of directors if
stockholder action is not required) have approved a definitive agreement to
merge or consolidate the Company with or into such other corporation, other
than, in either case, a merger or consolidation of the Company in which holders
of shares of the Common Stock immediately prior to the merger or consolidation
will hold at least a

                                       -5-


<PAGE>



majority of the ownership of common stock of the surviving corporation (and, if
one class of common stock is not the only class of voting securities entitled to
vote on the election of directors of the surviving corporation, a majority of
the voting power of the surviving corporation's voting securities) immediately
after the merger or consolidation, which common stock (and, if applicable,
voting securities) is to be held in substantially the same proportion as such
holders' ownership of Common Stock immediately before the merger or
consolidation; or

                           (iv) the date any entity, person or group, (within
the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act")), other than (A) the
Company or any of its Affiliates or any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its Affiliates or (B) any
person who, on the date the Plan is approved by the stockholders, shall have
been the beneficial owner of at least twenty percent (20%) of the outstanding
Common Stock, shall have become the beneficial owner of, or shall have obtained
voting control over, more than fifty percent (50%) of the outstanding shares of
the Common Stock.

                  (g) Transfers. No ISO granted under the Plan may be
transferred, except by will or by the laws of descent and distribution. During
the lifetime of the person to whom an ISO is granted, such Option may be
exercised only by such person. No NQSO under the Plan may be transferred, except
by will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder.

                  (h) Other Provisions. The Option Documents shall contain such
other provisions including, without limitation, additional restrictions upon the
exercise of the Option or additional limitations upon the term of the Option, as
the Administrator shall deem advisable.

                  (i) Amendment. The Administrator shall have the right to amend
Option Documents issued to such Optionee, subject to the Optionee's consent if
such amendment is not favorable to the Optionee, except that the consent of the
Optionee shall not be required for any amendment made under Subsection (f)
above.

         5.4      Exercise.

                  (a) Notice. No Option shall be deemed to have been exercised
prior to the receipt by the Company of written notice of such exercise and of
payment in full of the Option Price for the Option Shares to be purchased. Each
such notice shall (i) specify the number of Option Shares to be purchased, (ii)
satisfy the securities law requirements set forth in this Section 5.4, and (iii)
in the case of an ISO, state that the Optionee acknowledges that the Options
Shares may not be sold within one year of exercise, two years from the Grant
Date or later than three months following termination of employment, in order to
maintain the ISO status of the Option.

                  (b) Restricted Stock. Each exercise notice shall (unless the
Option Shares are covered by a then current registration statement or a
Notification under Regulation A under the

                                       -6-


<PAGE>



Securities Act of 1933, as amended (the "Securities Act")), contain the
Optionee's acknowledgment in form and substance satisfactory to the Company that
(i) such Option Shares are being purchased for investment and not for
distribution or resale (other than a distribution or resale which, in the
opinion of counsel satisfactory to the Company, may be made without violating
the registration provisions of the Securities Act); (ii) the Optionee has been
advised and understands that (A) the Option Shares have not been registered
under the Securities Act and are "restricted securities" within the meaning of
Rule 144 under the Securities Act and are subject to restrictions on transfer
and (B) the Company is under no obligation to register the Option Shares under
the Securities Act or to take any action which would make available to the
Optionee any exemption from such registration, (iii) such Option Shares may not
be transferred without compliance with all applicable federal and state
securities laws, and (iv) an appropriate legend referring to the foregoing
restrictions on transfer and any other restrictions imposed under the Option
Documents may be endorsed on the certificates. Notwithstanding the above, should
the Company be advised by counsel that the issuance of Option Shares upon the
exercise of an Option should be delayed pending (A) registration under federal
or state securities laws, (B) the receipt of an opinion that an appropriate
exemption therefrom is available, (C) the listing or inclusion of the Option
Shares on any securities exchange or in an automated quotation system or (D) the
consent or approval of any governmental regulatory body whose consent or
approval is necessary in connection with the issuance of such Option Shares, the
Company may defer the exercise of any Option granted hereunder until either such
event in A, B, C or D has occurred.

                  (c) Notice of Disqualifying Disposition. An Optionee shall
notify the Administrator if any Option Shares received upon the exercise of an
ISO are sold within one year of exercise or two years from the Grant Date.

                                   ARTICLE VI
                                  STOCK AWARDS

         6.1 Grants of Stock Awards. Stock Awards will consist of shares of
Common Stock ("Bonus Shares") transferred to recipients ("Recipient"), either
without payment therefor or with such payment as may be required by the
Administrator, as additional compensation for such Recipient's service to the
Company. Stock Awards shall be subject to such terms and conditions as the
Administrator determines appropriate including, without limitation, restrictions
on the sale or other disposition of such Bonus Shares and rights of the Company
to reacquire such Bonus Shares upon termination of the Recipient's employment or
service within specified periods.

         6.2 Transferability; Legends. Bonus Shares may be transferred only if
(i) the Bonus Shares are securities covered by a then current registration
statement or a Notification under Regulation A under the Securities Act, or such
transfer complies with the requirements of Rule 144 of the Exchange Act; and
(ii) such transfer does not violate any restriction imposed on the Stock Award.
The Bonus Shares may bear a legend referring to (x) the restrictions on
transferability of such Bonus Shares, or (y) if the Recipient is subject to
Section 16 of the Exchange Act at the time the Bonus Shares are issued, the
liability which may arise under Section 16 upon disposition of the Bonus Shares.

                                       -7-


<PAGE>



                                   ARTICLE VII
                                 ADMINISTRATION

         7.1 Administrator. The Administrator for purposes of the Non-Qualified
Plan and the Key Employee Plan will be as follows:

                  (a) Non-Qualified Plan. The grant of Options and Stock Awards
pursuant to the Non-Qualified Plan will be administered by the Board of
Directors of the Company. The Board of Directors of the Company may make such
interpretation and construction of the Non-Qualified Plan as necessary from
time to time in its sole discretion, such interpretation and construction of the
Non-Qualified Plan to be final, binding and conclusive.

                  (b) Key Employee Plan. With respect to the Key Employee Plan,
the Board of Directors shall appoint a committee (the "Committee") composed of
two or more non-employee directors (as the term "non-employee directors" is
defined under Rule 16b-3(b)(3) of the Exchange Act) to operate and administer
the Key Employee Plan. The Committee will administer the grant of Options and
Stock Awards pursuant to the Key Employee Plan.

         7.2 Meetings. The Committee shall hold meetings at such times and
places as it may determine. Acts approved at a meeting by a majority of the
members of the Committee or acts approved in writing by the unanimous consent of
the members of the Committee shall be the valid acts of the Committee.

         7.3 Discretion of Committee and the Board of Directors. The Committee
shall from time to time at its discretion grant Benefits pursuant to the terms
of the Key Employee Plan and the Board of Directors shall from time to time at
its discretion grant Benefits pursuant to the terms of the Non-Qualified Plan.
The Administrator, as the case may be, shall have plenary authority to determine
the Optionees or Recipients (each a "Participant") to whom and the times at
which Benefits shall be granted, the number of Plan Shares to be covered by such
grants and the price and other terms and conditions thereof, including a
specification with respect to whether an Option is intended to be an ISO,
subject, however, to the express provisions of the Key Employee Plan and
compliance with Rule 16b-3(d) under the Exchange Act. In making such
determinations the Administrator may take into account the nature of the
Participant's services and responsibilities, the Participant's present and
potential contribution to the Company's success and such other factors as it may
deem relevant. The interpretation and construction by the Administrator of any
provision of the Plan or of any benefit granted under it shall be final, binding
and conclusive.

         7.4 No Liability. No member of the Board of Directors or the Committee
shall be personally liable for any action or determination with respect to the
Plan or any benefit thereunder, or for any act or omission of any other member
of the Board of Directors or the Committee, including but not limited to the
exercise of any power and discretion given to him under the Key Employee Plan,
except those resulting from (i) any breach of such person's duty of loyalty to
the Company or its stockholders, (ii) acts or omissions not in good faith or

                                       -8-


<PAGE>



involving intentional misconduct or a knowing violation of law or (iii) any
transaction from which such person derived an improper personal benefit.

         7.5 Indemnification. In addition to such other rights of
indemnification as he may have as a member of the Board of Directors or the
Committee, and with respect to the administration of the Plan and the granting
of Benefits hereunder, each member of the Board of Directors and of the
Committee shall be entitled without further action on his part to be indemnified
by the Company for all expenses (including but not limited to reasonable
attorneys' fees and expenses, the amount of judgment and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit or proceeding with respect to
the administration of the Plan or the granting of Benefits hereunder in which he
may be involved by reason of his being or having been a member of the Board of
Directors or the Committee, whether or not he continues to be such member of the
Board of Directors or the Committee at the time of the incurring of such
expenses; provided, however, that such indemnity shall not include any expenses
incurred by such member of the Board of Directors or Committee: (i) in respect
of matters as to which he shall be finally adjudged in such action, suit or
proceeding to have been guilty of gross negligence or willful misconduct in the
performance of his duties as a member of the Board of Directors or the
Committee; or (ii) in respect of any matter in which any settlement is effected
in an amount in excess of the amount approved by the Company on the advice of
its legal counsel; and provided further that no right of indemnification under
the provisions set forth herein shall be available to or accessible by any such
member of the Administrator unless within ten (10) days after institution of any
such action, suit or proceeding he shall have offered the Company in writing the
opportunity to handle and defend such action, suit or proceeding at its own
expense. The foregoing right of indemnification shall inure to the benefit of
the heirs, executors or administrators of each such member of the Board of
Directors or the Committee and shall be in addition to all other rights to which
such member of the Board of Directors or the Committee would be entitled to as a
matter of law, contract or otherwise.

         7.6 Adjustments on Changes in Common Stock. The aggregate number of
shares of Common Stock as to which Options or Stock Awards may be granted under
the Non-Qualified Plan and the Key Employee Plan, the number of Option Shares
covered by each outstanding Option and the Option Price per Option Share
specified in each outstanding Option shall be appropriately adjusted in the
event of a stock dividend, stock split or other increase or decrease in the
number of issued and outstanding shares of Common Stock resulting from a
subdivision or consolidation of the Common Stock or other capital adjustment
(not including the issuance of Common Stock on the conversion of other
securities of the Company which are convertible into Common Stock) effected
without receipt of consideration by the Company. The Board of Directors shall
have the authority to determine the adjustments to be made under this Section
and any such determination by the Board of Directors shall be final, binding and
conclusive, provided that no adjustment shall be made which will cause an ISO to
lose its status as such.



                                       -9-


<PAGE>


                                  ARTICLE VIII
                                  MISCELLANEOUS

         8.1 Amendment of the Plan. The Board of Directors may amend the Plan
from time to time in such manner as it may deem advisable. Notwithstanding the
foregoing, with respect to the Key Employee Plan, any amendment which would
change the eligibility of employees or the class of employees eligible to
receive an Option or increase the maximum number of shares as to which Options
may be granted, will only be effective if such action is approved by the holders
of stock of the Company having a majority of the vote.

         8.2 Continued Employment. The grant of an Option pursuant to the Plan
shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of the Company to continue the employment of the
Participant or the service as a member of the Board of Directors, as a
consultant or in any other capacity, whichever the case may be with the Company
or any of its Affiliates.

         8.3 Withholding of Taxes. Whenever the Company proposes or is required
to issue or transfer Option Shares or Bonus Shares, the Company shall have the
right to (a) require the recipient or transferee to remit to the Company an
amount sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery or transfer of any certificate or
certificates for such Option Shares or Bonus Shares, or (b) take whatever action
it deems necessary to protect its interests, including withholding a portion of
such Option Shares or Bonus Shares.


                                      -10-







<PAGE>

                                   Exhibit 21
                         Subsidiaries of the Registrant

Names of Subsidiaries and Names
Under Which Subsidiaries Do Business            Jurisdiction of Incorporation
- ------------------------------------            ----------------------------

1.       inTEST Limited                         England

2.       inTEST Kabushiki Kaisha                Japan

3.       inTEST PTE, Ltd.                       Singapore






<PAGE>
                                                                    Exhibit 23.1

Consent of Independent Certified Public Accountants

The Board of Directors
inTEST Corporation:

The audits referred to in our report dated March 14, 1997, included the related
financial statement schedule for each of the years in the three-year period
ended December 31, 1996, included in the registration statement. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement schedule
based on our audits. In our opinion, the financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.

We consent to the use of our reports included herein and to the references to
our firm under the headings "Selected Consolidated Financial Data" and "Experts"
in the prospectus.


/s/ KPMG Peat Marwick LLP
- -------------------------



Philadelphia, Pennsylvania
May 1, 1997






<PAGE>
                                                                    Exhibit 23.3

                          CONSENT OF RATNER & PRESTIA

     We hereby consent to the reference to our firm under the headings "Legal
Matters" and "Experts" in this Registration Statement and the related Prospectus
of inTEST Corporation.

                                     RATNER & PRESTIA


                                     /s/ Allan Ratner
                                     ------------------
                                         Allan Ratner

Berwyn, PA
May 2, 1997





<TABLE> <S> <C>


<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AUDITED
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001036262
<NAME> INTEST CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JAN-01-1996
<PERIOD-END>                               DEC-31-1996
<EXCHANGE-RATE>                                  1.000
<CASH>                                           3,692
<SECURITIES>                                         0
<RECEIVABLES>                                    2,041
<ALLOWANCES>                                        88
<INVENTORY>                                      1,313
<CURRENT-ASSETS>                                 7,028
<PP&E>                                           1,269
<DEPRECIATION>                                     676
<TOTAL-ASSETS>                                   7,716
<CURRENT-LIABILITIES>                            2,651
<BONDS>                                            155
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                            38
<OTHER-SE>                                       4,549
<TOTAL-LIABILITY-AND-EQUITY>                     7,716
<SALES>                                         18,582
<TOTAL-REVENUES>                                18,582
<CGS>                                            6,755
<TOTAL-COSTS>                                    6,211
<OTHER-EXPENSES>                                   101
<LOSS-PROVISION>                                    50
<INTEREST-EXPENSE>                                  11
<INCOME-PRETAX>                                  5,717
<INCOME-TAX>                                       858
<INCOME-CONTINUING>                              4,859
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                     4,646
<EPS-PRIMARY>                                        0
<EPS-DILUTED>                                        0
        

</TABLE>






<TABLE> <S> <C>


<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
FINANCIAL STATEMENTS FOR THE THREE-MONTHS ENDED MARCH 31, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001036262
<NAME> INTEST CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-START>                             JAN-01-1997
<PERIOD-END>                               MAR-31-1997
<EXCHANGE-RATE>                                  1.000
<CASH>                                           2,983
<SECURITIES>                                         0
<RECEIVABLES>                                    2,583
<ALLOWANCES>                                        88
<INVENTORY>                                      1,178
<CURRENT-ASSETS>                                 6,823
<PP&E>                                           1,251
<DEPRECIATION>                                     701
<TOTAL-ASSETS>                                   7,492
<CURRENT-LIABILITIES>                            2,899
<BONDS>                                            148
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                            38
<OTHER-SE>                                       4,116
<TOTAL-LIABILITY-AND-EQUITY>                     7,492
<SALES>                                          3,887
<TOTAL-REVENUES>                                 3,887
<CGS>                                            1,602
<TOTAL-COSTS>                                    1,278
<OTHER-EXPENSES>                                   (15) 
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   4
<INCOME-PRETAX>                                  1,022
<INCOME-TAX>                                       167
<INCOME-CONTINUING>                                855
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                       844
<EPS-PRIMARY>                                        0
<EPS-DILUTED>                                        0
        


</TABLE>