<PAGE>

                                                                   Exhibit 10.10

                MARQUETTE CAPITAL BANK, N. A. - LETTER AGREEMENT



November 4, 1999



To:      August Technology Corporation (the "Borrower")
         5237 Edina Industrial Blvd.
         Edina, Minnesota 55439

Gentlemen:

This letter agreement confirms the additional agreements between the Borrower
and Marquette Capital Bank, N. A. (the "Bank"). In consideration of the mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the parties, the
Borrower and the Bank agree as follows:

         1. Subject to the provisions of this letter agreement, at the
Borrower's request, the Bank shall make loans to the Borrower during the period
from the date of this letter agreement to May 31, 2000 in an aggregate amount
not exceeding Two Million Seven Hundred and Fifty Thousand Dollars
($2,750,000.00) at any time outstanding (the "Line of Credit"). The Line of
Credit is a revolving line of credit, and the Borrower may borrow, prepay and
reborrow under the Line of Credit. The Borrower's obligation to repay such loans
and to pay interest and other charges, fees and expenses thereon is evidenced by
the Borrower's promissory note dated November 4, 1999 payable to the order of
the Bank in the principal amount of exceeding Two Million Seven Hundred and
Fifty Thousand Dollars ($2,750,000.00) (together with any amendments,
extensions, renewals and replacements thereof, called the "Revolving Note"). The
Bank shall have no obligation to make any such loan after the occurrence of any
Event of Default.

         2. Subject to the provisions of this letter agreement, at the
Borrower's request, the Bank shall issue one or more standby letters of credit
for the account of the Borrower (each a "Letter of Credit") from time to time
during the period from the date hereof to and including the expiration date in
an aggregate amount at any time outstanding not to exceed the amount of the line
of credit less the sum of (A) all outstanding advances under the line of credit
and (B) the letter of credit amount. The Borrower acknowledges and agrees that
the letter of Credit amount shall reduce the line of credit amount available for
advances. Each Letter of Credit request will be further evidenced by an
application and reimbursement agreement.

         3. The Borrower shall pay the following fees to the Bank: With respect
to each Letter of Credit, the Borrower shall pay to the Bank annually and in
advance a letter of credit fee equal to one percent (1.0%) per annum on the face
amount of such Letter of Credit, computed for the period commencing on the date
of issuance of such Letter of Credit and ending on the expiration date thereof.
In addition, the Borrower agrees to pay to the Bank, on written demand


                                       1
<PAGE>

by the Bank, the administrative fees charged by the Bank in the ordinary
course of business in connection with the honoring of drafts under any Letter
of Credit and for all other activity with respect to any Letter of Credit at
the then-current rates of the Bank.

         THE BORROWER SHALL NOT AT ANY TIME PERMIT THE UNPAID PRINCIPAL BALANCE
OF THE REVOLVING NOTE PLUS THE AMOUNT OF OUTSTANDING LETTERS OF CREDIT TO EXCEED
THE BORROWING BASE.

         4. As long as any now existing or hereafter arising debt, obligation or
liability of the Borrower to the Bank (including but not limited to any debt,
obligation or liability relating to any letter of credit) shall remain
outstanding, the Borrower shall comply with the following requirements:

                  a. The Borrower shall deliver to the Bank, in form and
substance acceptable to the Bank:

                  As soon as available, and in any event within 120 days after
                  each fiscal year of the Borrower, the annual audited financial
                  statements of the Borrower for such fiscal year, prepared in
                  accordance with GAAP; and

                  As soon as available, and in any event within 30 days after
                  the end of each fiscal year of the Borrower, the projected
                  financial statements of the Borrower for the next fiscal year;
                  and

                  As soon as available, and in any event within 30 days after
                  the end of each month, the financial statements. of the
                  Borrower for such period, prepared by the Borrower in
                  accordance with GAAP; and

                  As soon as available, and in any event within 30 days after
                  the end of each month, an aging and a listing of accounts
                  receivable of the Borrower and a listing of inventory of the
                  Borrower as of the end of such period; and

                  As soon as available, and in any event within 30 days after
                  the end of each month, a Borrowing Base and Covenant
                  Compliance Certificate in the form of Exhibit A attached
                  hereto, completed with amounts determined as of the end of
                  such period; and

                  At least once every 12 months, and as otherwise requested by
                  the Bank, the current signed personal financial statements of
                  any guarantors of any of the Borrower's indebtedness to the
                  Bank (called the "Guarantors"); and

                  Within 45 days after the same are filed with the United States
                  Internal Revenue Service, the annual federal income tax
                  returns of the Borrower and any Guarantors, including all
                  schedules, attachments and amendments thereto; and


                                       2
<PAGE>

                  Within 10 days after the Bank's request therefor, such other
                  information about the Borrower and any Guarantors as the Bank
                  may reasonably request from time to time.

                  b. The Borrower shall keep accurate books and records in which
         true and complete entries will be made in accordance with GAAP. Upon
         request of the Bank, the Borrower, during normal business hours, shall
         give any representatives of the Bank access to and permit such
         representatives to examine and copy all books, records and other
         writings in its possession, to inspect its property and to discuss its
         finances, accounts, property and business with any of its officers and
         directors.

                  c. The Borrower shall file when due all required tax returns,
         shall pay when due all taxes, assessments and other governmental
         charges levied or imposed upon it or upon its income or profits or upon
         any of its property, and shall pay when due all lawful claims for
         labor, materials and supplies which, if unpaid, might become a lien or
         charge upon any property of the Borrower; provided, that the Borrower
         shall not be required to pay any such tax, assessment, charge or claim
         whose amount, applicability or validity is being contested in good
         faith by appropriate proceedings.

                  d. The Borrower shall keep and maintain its inventory,
         equipment, real estate and other property necessary or useful in its
         business in good condition and repair and shall pay when due all rental
         and mortgage payments due on such property; provided, that nothing in
         this Section shall prevent the Borrower from discontinuing the
         operation and maintenance of any such property if such discontinuance
         is desirable in the conduct of the Borrower's business and is not
         disadvantageous to the Bank.

                  e. The Borrower shall obtain and maintain insurance with
         insurers that are acceptable to the Bank, in such amounts and with such
         coverages (including without limitation professional liability
         insurance, public liability insurance, fire, hazard and extended
         coverage insurance on all of its assets, necessary workers'
         compensation insurance, and all other coverages as are consistent with
         industry practice) as are acceptable to the Bank.

                  f. The Borrower shall not declare or pay any dividends or
         other distributions on account of any shares of its stock or any of its
         other ownership interests, or make any payment on account of any
         purchase, redemption or other retirement of any shares of such stock or
         any such ownership interests, or make any other payment or distribution
         on account of any shares of stock or any ownership interests, or any
         warrant or option therefor, either directly or indirectly.

                  g. The Borrower shall preserve and maintain its existence and
         all of its rights, privileges and franchises, and shall comply with all
         applicable laws and regulations.

                  h. The Borrower shall not create, incur or permit to exist in
         favor of any person other than the Bank any mortgage, deed of trust,
         assignment, security interest or


                                       3
<PAGE>


         other than on any of its property now owned or hereafter acquired,
         except purchase money security interests securing indebtedness
         permitted by Section 3(h)(ii).

                  i. The Borrower shall not incur, create, assume or permit to
         exist any Funded Debt, except:

                           (i)      Indebtedness to the Bank;

                           (ii) Indebtedness in an aggregate amount not to
                  exceed at any time outstanding $500,000 incurred in the
                  purchase (or borrowing for the purchase) or lease of
                  equipment.

                  j. The Borrower shall maintain its primary operating deposit
         account at the Bank.

                  k. The Borrower shall comply with the following requirements:

                  The Borrower shall not permit the aggregate amount of the
                  Borrower's Capital Expenditures in any fiscal year of the
                  Borrower to exceed $750,000.

                  The Borrower shall not permit the Borrower's Tangible Net
                  Worth to be less than $2,750,000.

                  The Borrower shall not permit the ratio of Debt to Tangible
                  Net Worth of the Borrower to be more than 1.5 to 1.

                  The Borrower shall not permit the Borrower's cumulative EBITDA
                  to be less than the amounts described in the following table
                  for the indicated periods:
<TABLE>
<CAPTION>
                                PERIOD                          MINIMUM EBITDA
                         <S>                                    <C>
                          12/31/98 - 9/30/99                    $250,000
                          12/31/98 - 12/31/99                   $350,000
                          12/31/99 - 3/31/00                    $150,000
</TABLE>
                  l. Year 2000 Compliance. "Year 2000 Compliance" means, with
         regard to any person or entity, that all software, embedded microchips,
         and other processing capabilities utilized by, and material to the
         business operations or financial condition of, such person or entity
         are able to interpret and manipulate data on and involving all calendar
         dates correctly and without causing any abnormal ending scenario,
         including but not limited to all dates in and after the year 2000. The
         Borrower represents and warrants to the Bank and agrees that: (a) the
         Borrower has made due inquiry to determine whether the computer
         applications and hardware the Borrower and the Borrower's material
         suppliers and customers will be Year 2000 Compliant by January 1, 2000;
         and (b) the Borrower has a plan to become Year 2000 compliant. By
         January 1, 2000, and the Borrower agrees to devote adequate resources
         toward, diligently pursue, and take all actions necessary to complete
         such plan and become Year 2000 Compliant by January 1,


                                       4
<PAGE>

         2000; and (c) to the best of the B6rrower's knowledge, all of the
         Borrower's material suppliers and customers will be Year 2000 Compliant
         by January 1, 2000; and (d) the Borrower agrees to deliver to the Bank
         such information regarding the plans and progress of the Borrower
         and the Borrower's material suppliers and customers toward becoming
         Year 2000 Compliant as the Bank may reasonably request from time to
         time,including but not limited to any assessment by a third party of
         the Borrower's efforts to become Year 2000 Compliant; (e) at the
         Banks request from time to time,the Borrower shall order, obtain, and
         deliver to the Bank a copy of audits of the Borrower's plans and
         progress to become Year 2000 Compliant by January 1, 2000, and the
         Borrower shall permit the Bank and the Bank's representatives to
         conduct audits of the Borrower's operations for such purpose, and (f)
         the Borrower shall substantially complete implementation of the
         Borrower's plan and remediation of material Year 2000 problems by
         September 30, 1999. Breach of any representation, warranty or agreement
         in this paragraph, or failure of the Borrower or a significant portion
         of the Borrower's material suppliers and customers to become Year 2000
         Compliant by January 1, 2000 shall constitute an Event of Default
         hereunder.

         5. In this letter agreement:

                  a. "Borrowing Base" means the sum of (i) 80% of Eligible
         Accounts Receivable, plus (ii) the lesser of 50% of Eligible Inventory
         or $1,375,000.

                  b. "Capital Expenditures" means all expenditures for any
         assets, or for improvements, replacements, substitutions or additions
         therefor or thereto, which are capitalized on the balance sheet and
         which, in accordance with GAAP, are required to be included in or
         reflected by the property, plant or equipment or similar fixed asset
         account reflected in such balance sheet, and shall include without
         limitation capitalized lease obligations.

                  c. "Debt" means (i) all items of indebtedness or liability of
         the Borrower which in accordance with GAAP would be included in
         determining total liabilities as shown on the liabilities side of the
         Borrower's balance sheet on the date as of which Debt is to be
         determined, plus (ii) indebtedness secured by any mortgage, pledge, hen
         or security interest on property of the Borrower, whether or not the
         indebtedness secured thereby shall have been assumed, plus (iii)
         guaranties, endorsements (other than for purposes of collection in the
         ordinary course of business) and other contingent obligations of the
         Borrower in respect of, or to purchase or otherwise acquire
         indebtedness of others.

                  d. "EBITDA" means for any period of determination, the net
         income of the Borrower for such period plus (i.) deductions for
         Interest Expense, income taxes, depreciation and amortization for such
         period, minus (ii) extraordinary income and gains (losses) on sales of
         assets during such period, all as determined in accordance with GAAP.



                                       5
<PAGE>

                  e. "Eligible Accounts Receivable" means only such accounts
         receivable of the Borrower as the Bank, in its sole discretion, shall
         deem eligible. Without limiting the discretion of the Bank to consider
         any account receivable not to be an Eligible Account Receivable, and by
         way of example only of the types of accounts receivable that the Bank
         will consider not to be Eligible Accounts Receivable, notwithstanding
         any earlier classification of eligibility, the following accounts
         receivable shall not be considered Eligible Accounts Receivable: (i)
         any account receivable which is not paid in full within 90 days after
         it is created; (ii) any account receivable as to which any warranty is
         breached; (iii) any account receivable as to which the account debtor
         or other obligor disputes liability or makes any claim; (iv) any
         account receivable owed by any officer, director or shareholder of the
         Borrower or any of their relatives or any partnership, corporation,
         association, joint venture or other business entity wholly or partly
         owned or controlled directly or indirectly by the Borrower or any of
         them or any of their relatives; (v) any account receivable owed by any
         person as to whom a petition in bankruptcy or other application for
         relief is filed under any bankruptcy, reorganization, receivership,
         moratorium, insolvency or s law; (vi) any account receivable owed by
         any person who makes an assignment for the benefit of creditors,
         becomes insolvent, fails, suspends business, or goes out of business;
         (vii) any account receivable owed by the United States government or
         any agency of the United States government; (viii) any account
         receivable owed by any person if 10% or more in amount of the accounts
         receivable owed by such person to the Borrower are considered
         ineligible; (ix) consignment receivables; (x) bonded receivables; (xi)
         any account receivable constituting a retainage; (xii) any account
         receivable for goods which have not been shipped or work which has not
         been fully performed; (xiii) any account receivable owed by any person
         outside the United States of America, except account debtors approved
         in writing by the Bank (approved foreign account debtors are described
         on Exhibit B) ; (xiv) any account receivable owed by any person with
         whose creditworthiness the Bank becomes dissatisfied; and (xv) any
         account receivable in which the Bank does not have a perfected security
         interest constituting a first hen. In the event the Borrower owes any
         amount to any person that owes an account receivable to the Borrower,
         such amount owed by the Borrower shall be deducted from that portion of
         the account receivable which would otherwise qualify as an Eligible
         Account Receivable and only the difference thereof shall be considered
         an Eligible Account Receivable. No account receivable which does not
         qualify as an Eligible Account Receivable shall be considered an
         Eligible Account Receivable unless the Bank, upon the written request
         of the Borrower, states in writing that such account receivable is to
         be considered an Eligible Account Receivable.

                  f. "Eligible Inventory" means the lesser of cost or fair
         market value of only such raw materials inventory and finished goods
         inventory of the Borrower as the Bank, in its sole discretion, shall
         deem eligible. Without limiting the discretion of the Bank to consider
         any inventory not to be Eligible Inventory, notwithstanding any earlier
         classification of eligibility, the following inventory shall not be
         considered Eligible Inventory: (i) any inventory which does not
         constitute finished goods, or which does not constitute raw materials
         that are to be used or consumed by the Borrower in the normal course of
         its business in the processing of such raw materials into finished
         goods which, upon completion, will constitute Eligible Inventory; (ii)
         any inventory which does not


                                       6
<PAGE>

         meet all standards imposed by any governmental agency; (iii) any
         inventory which is not located in the United States of America; (iv)
         any inventory which is obsolete, or which is not usable by the
         Borrower in the normal course of its business; (v) any inventory
         which is on consignment to or from any other person, or which has been
         sold or otherwise delivered, transferred or conveyed to any other
         person, or which is subject to any bailment or lease; (vi) any finished
         goods inventory which is not held for sale by the Borrower in the
         normal course of its business, or which is not saleable by the Borrower
         in the normal course of its business; and (vii) any inventory in which
         the Bank does not have a perfected security interest constituting a
         first lien.

                  g. "Event of Default" means any default or event of default
         under any existing or future note or other agreement of the Borrower
         with the Bank.

                  h. "GAAP" means generally accepted accounting principles
         consistently applied. Except as otherwise approved by the Bank in
         writing, all financial reporting, financial record keeping, and
         financial calculations in connection with this letter agreement shall
         be made on the basis of accounting principles, methods, elections and
         estimates that are consistent and that are consistent with the
         accounting principles, methods, elections and estimates used in the
         last annual financial statements of the Borrower delivered by tie
         Borrower to the Bank before or upon the execution of this letter
         agreement, and that fairly present the financial condition or results
         of operations for the period then ended.

                  i.       "Tangible Net Worth" means the difference of:

                           (i) the tangible assets of the Borrower which, in
                           accordance with GAAP, are tangible assets, after
                           deducting adequate reserves in each case where, in
                           accordance with GAAP, a reserve is proper, minus

                           (ii)  all Debt of the Borrower;

provided, that (A) inventory shall be taken into account on the basis of the
cost or current market value, whichever is lower, (B) in no event shall there be
included as such tangible assets patents, trademarks, tradenames, copyrights,
licenses, good will, memberships, or treasury stock or any securities or debt of
the Borrower, or any officer, director, employee, agent, shareholder or
affiliate of the Borrower, or any officer, director, employee, agent,
shareholder or affiliate of any shareholder or affiliate of the Borrower, or any
other debt or securities unless the same are readily marketable in the United
States of America, (C) securities included as such tangible assets shall be
taken into account at their current market price or cost, whichever is lower,
and (D) any write-up in the book value of any assets shall not be taken into
account.

         6. In addition to all other defaults and events of default, each of the
following events shall constitute a default and an event of default under each
of the Borrower's existing and future notes and other agreements with the Bank:
The Borrower's failure to comply with any provision of this letter agreement;
Jeff O'Dell is no longer the President of the Borrower and a collateral


                                       7
<PAGE>

survey prepared by an outside firm and acceptable to the Bank has not been
completed prior to December 31, 1999 at the Borrower's expense.

         7. The Borrower consents to the personal jurisdiction of the state
and federal courts located in the State of Minnesota in connection with any
controversy relating in any way to this letter agreement or to any
transaction or matter relating to this letter agreement, waives any argument
that venue in such forums is not convenient, and agrees that any litigation
initiated by the Borrower against the Bank relating in any way to this letter
agreement or to any transaction or matter relating to this letter agreement
shall be venued in either the Minnesota District Court of the county where
the Bank is located, or the United States District Court, District of
Minnesota.

         8. No provision of this letter agreement can be amended, modified,
waived or terminated, except by a writing executed by the Borrower and the
Bank. The Borrower shall pay to the Bank on demand all of the Bank's costs
and expenses, including but not limited to reasonable attorneys' fees and
legal expenses, in connection with this letter agreement, the writings
executed herewith, and the transactions described herein and therein. This
letter agreement shall bind and benefit the parties and their respective
successors and assigns; provided, the Borrower shall not assign any of its
rights or obligations under this letter agreement without the prior written
consent of the Bank, and any assignment in violation of this sentence shall
be null and void. This letter agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.

         9. This letter agreement supersedes and replaces all prior commitment
letters, proposal letters, term sheets, and other statements of loan terms
issued by the Bank to the Borrower, and all such letters and term sheets are
terminated.

Sincerely,

MARQUETTE CAPITAL BANK, N.A.


By___________________________
    Ryan McKinney
    Title:  Vice President

         The Borrower agrees to this letter agreement.



                                       8
<PAGE>

         THE BORROWER REPRESENTS AND WARRANTS TO THE BANK AND AGREES THAT THE
BORROWER HAS READ ALL OF THIS LETTER AGREEMENT AND UNDERSTANDS ALL OF THE
PROVISIONS OF THIS LETTER AGREEMENT.


         Executed as of November 4, 1999.



By_________________________________
    Tom C. Velin
    Title:  Chief Financial Officer









































                                        9
<PAGE>



                                    EXHIBIT A
                     BORROWER: AUGUST TECHNOLOGY CORPORATION
                BORROWER BASE AND COVENANT COMPLIANCE CERTIFICATE


         I,____________________the___________________________ of August
Technology Corporation, a corporation (the "Borrower"), pursuant to the
letter agreement dated November 4, 1999 (the "Agreement"), hereby certify to
Marquette Capital Bank, N.A. (the "Bank") as follows:

BORROWING BASE

         As of the close of business on______________ , the Borrowing Base
and the unpaid principal balance of the Revolving Note were as follows:
<TABLE>
<S>      <C>                        <C>                                                <C>
1.       Accounts Receivable                                                            $__________________(1)

2.       Less:  Ineligibles
                  Over 90 days      $___________
                  10% Rule          $___________
                  Other Ineligibles $___________
                  Total Ineligibles $___________                                        $__________________(2)

3.       Eligible Accounts Receivable (1 minus 2)                                       $__________________(3)

4.       80% of Line 3                                                                  $__________________(4)

5.       Eligible Inventory                                                             $__________________(5)

6.       Lesser of 50% of Line 5 or $1,375,000                                          $__________________(6)

7.       Borrowing Base (4 plus 6)                                                      $__________________(7)

8.       Credit Limit (lesser of $2,750,000                                             $__________________(8)
         or Line 7)

9.       Unpaid Principal Balance of                                                    $__________________(9)
         Revolving Note

10.      Outstanding Amount of Letters of Credit                                        $__________________(10)

11.      Availability or (Shortfall) (8 minus 9 minus 10)                               $__________________(11)
</TABLE>

FINANCIAL COVENANTS

As of the dose of business on_________________, the following amounts and
ratios were true and correct:


                                       10
<PAGE>

<TABLE>
<CAPTION>

1.       CAPITAL EXPENDITURES IN FISCAL YEAR ENDING
         <S>     <C>                                                                <C>
         a.       Actual Capital Expenditures                                       $____________________

         b.       Maximum Amount                                                    $      750,000

2.       TANGIBLE NET WORTH

         a.       Actual Tangible Net Worth                                         $____________________

         b.       Minimum Tangible Net Worth                                        $    2,750,000

3.       RATIO OF DEBT TO TANGIBLE NET WORTH

         a.       Debt                                                              $____________________

         b.       Tangible Net Worth                                                $____________________

         c.       Actual Ratio of Debt to Tangible Net Worth                         _________to 1

         d.       Maximum Ratio                                                          1.50 to 1

4.       MINIMUM EBITDA:

         a.       Actual EBITDA 12/31/98 - 9/30/99                                  $____________________
                           Minimum EBITDA required                                  $    250,000

         b.       Actual EBITDA 12/31/98 - 12/31/99                                 $____________________
                           Minimum EBITDA required                                  $    350,000

         c.       Actual EBITDA 12/31/99 - 3/31/00                                  $____________________
                           Minimum EBITDA required                                  $    150,000

</TABLE>

         AS OF THE DATE OF THIS CERTIFICATE, NO EVENT HAS OCCURRED WHICH
CONSTITUTES AN EVENT OF DEFAULT AS DEFINED IN THE AGREEMENT.


Date of Certificate:___________________________________


                                                   _________________________
                                                   Signature


                                       11

<PAGE>

                                    EXHIBIT B

                     BORROWER: AUGUST TECHNOLOGY CORPORATION
                        APPROVED FOREIGN ACCOUNT DEBTORS

                              MARUBENI CORPORATION
                              METRON TECHNOLOGY LTD









                                       12

<PAGE>

[LOGO]  MARQUETTE CAPITAL BANK -- AMENDMENT TO
                       LETTER AGREEMENT


This Agreement is made as of this 10 day of March 2000, by and between
Marquette Capital Bank, N.A., a national banking association, having its
office at 60 South Sixth Street, Minneapolis, MN (the "Bank") and August
Technology Corporation, a corporation, (the "Borrower").

                                    RECITALS

A.  The Borrower executed and delivered to the Bank that certain promissory
    Note, dated November 4, 1999, in the original principal amount of
    2,750,000.00 (the "Note").

B.  The Borrower further executed and delivered to the Bank that certain
    Letter Agreement, dated November 4, 1999, (the "Letter Agreement")
    pursuant to which additional agreements were made between the Borrower and
    the Bank regarding advances under the Note.

C.  The Borrower has requested and the Bank is willing to amend the Minimum
    EBITDA covenant as it appears in the Letter Agreement.

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

The Borrower will not be required to obtain a Minimum EBITDA for the period
between 1/1/99 to 03/31/00.

The Letter Agreement is amended only to the extent necessary to reflect the
changes set forth herein.

IN WITNESS WHEREOF, the parties hereto have each duly executed this Amendment
effective as of the day and year first above written.

MARQUETTE CAPITAL BANK, N.A.                     AUGUST TECHNOLOGY CORPORATION


By /s/ Ry McKinney                               By /s/ [ILLEGIBLE]
  -----------------------------                    ----------------------------
 Its    VP                                        Its        CFO
    ---------------------------                      --------------------------