Exhibit 2.1

SETTLEMENT AND PURCHASE AGREEMENT    DATED FEBRUARY 26, 2003    AMONG    AUGUST TECHNOLOGY CORPORATION    SEMICONDUCTOR TECHNOLOGIES & INSTRUMENTS, INC.
AND    ASTI HOLDINGS LIMITED

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TABLE OF CONTENTS

|                                                              |       |   |                                                   | Page
|------------------------------------------------------------- | ----- | - | ------------------------------------------------- | ----
|ARTICLE 1    DEFINITIONS                                      |       | 1
|                                                              | 1.1)  |   | Specific Definitions                              |     
|ARTICLE 2    PURCHASE AND SALE; PURCHASE PRICE                |       | 5
|                                                              | 2.1)  |   | Purchase and Sale of Shares                       |     
|                                                              | 2.2)  |   | Purchase and Sale of Assets                       |     
|                                                              | 2.3)  |   | Purchase Price                                    |     
|                                                              | 2.4)  |   | Payment of Purchase Price                         |     
|                                                              | 2.5)  |   | August Stock Price                                |     
|                                                              | 2.6)  |   | Tax Treatment                                     |     
|ARTICLE 3    REPRESENTATIONS AND WARRANTIES OF STI AND ASTIHL |       | 6
|                                                              | 3.1)  |   | Listing of Certain Assets and Data                |     
|                                                              | 3.2)  |   | Organization; Directors and Officers              |     
|                                                              | 3.3)  |   | Capitalization and Voting Rights                  |     
|                                                              | 3.4)  |   | This section intentionally omitted                |     
|                                                              | 3.5)  |   | Authority of ASTIHL                               |     
|                                                              | 3.6)  |   | Ownership of Shares/Status of ASTIHL              |     
|                                                              | 3.7)  |   | Subsidiaries                                      |     
|                                                              | 3.8)  |   | Authorization and Binding Obligation              |     
|                                                              | 3.9)  |   | Consents Required                                 |     
|                                                              | 3.10) |   | Financial Statements                              |     
|                                                              | 3.11) |   | Taxes                                             |     
|                                                              | 3.12) |   | Absence of Undisclosed Liabilities                |     
|                                                              | 3.13) |   | Absence of Certain Changes and Events             |     
|                                                              | 3.14) |   | Assets                                            |     
|                                                              | 3.15) |   | Intellectual Property                             |     
|                                                              | 3.16) |   | Accounts Receivable                               |     
|                                                              | 3.17) |   | Inventories                                       |     
|                                                              | 3.18) |   | Licenses; Compliance with Laws, Regulations, Etc. |     
|                                                              | 3.19) |   | Litigation                                        |     
|                                                              | 3.20) |   | Warranties                                        |     
|                                                              | 3.21) |   | Leases, Contracts                                 |     
|                                                              | 3.22) |   | Insurance Policies                                |     
|                                                              | 3.23) |   | Labor Agreements                                  |     
|                                                              | 3.24) |   | Benefit Plans                                     |     
|                                                              | 3.25) |   | No Finders                                        |     
|                                                              | 3.26) |   | Contracts with Related Parties                    |     
|                                                              | 3.27) |   | Relations with Suppliers and Customers            |     
|                                                              | 3.28) |   | Product Liability Claims                          |     
|                                                              | 3.29) |   | Environmental Matters                             |     
|                                                              | 3.30) |   | Location of Real Property                         |     
|                                                              | 3.31) |   | Title to Real Property                            |     
|                                                              | 3.32) |   | Business and Marketing Plans                      |     
|                                                              | 3.33) |   | Employees                                         |     
|                                                              | 3.34) |   | Agreements Restricting Business                   |     
|                                                              | 3.35) |   | Corporate Records                                 |     
|                                                              | 3.36) |   | Propriety of Past Payments                        |     
|                                                              | 3.37) |   | Investment Representations                        |     
|                                                              | 3.38) |   | Completeness of Disclosures                       |     

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|                                                      | 3.39) |    | No Implied Representations                                      |  | 18
|----------------------------------------------------- | ----- | -- | --------------------------------------------------------------- |  | --
|ARTICLE 4    REPRESENTATIONS AND WARRANTIES OF AUGUST |       | 19
|                                                      | 4.1)  |    | Organization                                                    |  | 19
|                                                      | 4.2)  |    | Authorization and Binding Obligation                            |  | 19
|                                                      | 4.3)  |    | Consents Required                                               |  | 19
|                                                      | 4.4)  |    | No Finders                                                      |  | 19
|                                                      | 4.5)  |    | Capital Stock                                                   |  | 19
|                                                      | 4.6)  |    | SEC Documents                                                   |  | 19
|                                                      | 4.7)  |    | Absence of Certain Changes of Events                            |  | 20
|                                                      | 4.8)  |    | Issuance of August Common Stock                                 |  | 20
|                                                      | 4.9)  |    | Completeness of Disclosures                                     |  | 21
|                                                      | 4.10) |    | No Implied Representations                                      |  | 21
|ARTICLE 5    PRE-CLOSING COVENANTS                    |       | 21
|                                                      | 5.1)  |    | Approvals and Consents                                          |  | 21
|                                                      | 5.2)  |    | Preserve Accuracy of Representations and Warranties             |  | 21
|                                                      | 5.3)  |    | Maintain the Business as Going Concern                          |  | 21
|                                                      | 5.4)  |    | No Solicitation of Other Offers                                 |  | 23
|                                                      | 5.5)  |    | Access to Information and Records Before Closing                |  | 23
|                                                      | 5.6)  |    | Approval of ASTIHL                                              |  | 23
|                                                      | 5.7)  |    | Intellectual Property Transfers                                 |  | 24
|                                                      | 5.8)  |    | Transfer by Related Parties                                     |  | 24
|                                                      | 5.9)  |    | Additional Financial Statements and Reports                     |  | 24
|                                                      | 5.10) |    | Certain Notifications                                           |  | 24
|                                                      | 5.11) |    | Intercompany Debts                                              |  | 24
|                                                      | 5.12) |    | Distribution of the Fixed Assets Related to Machining Equipment |  | 24
|                                                      | 5.13) |    | Audit Reports                                                   |  | 25
|                                                      | 5.14) |    | Termination of Lease                                            |  | 25
|                                                      | 5.15) |    | Release Agreement                                               |  | 25
|                                                      | 5.16) |    | Tax Matters                                                     |  | 25
|                                                      | 5.17) |    | Employees                                                       |  | 26
|                                                      | 5.18) |    | Fees and Expenses                                               |  | 26
|                                                      | 5.19) |    | Further Actions                                                 |  | 26
|                                                      | 5.20) |    | Benefit Plans                                                   |  | 26
|                                                      | 5.21) |    | Initial Funding Deposit                                         |  | 27
|                                                      | 5.22) |    | Payment of Accounts Payable and Other Liabilities               |  | 27
|                                                      | 5.23) |    | Right of First Refusal Agreement                                |  | 27
|ARTICLE 6    CLOSING CONDITIONS                       |       | 27
|                                                      | 6.1)  |    | Conditions to Obligations of August and ASTIHL                  |  | 27
|                                                      | 6.2)  |    | Conditions to August's Obligations                              |  | 28
|                                                      | 6.3)  |    | Conditions to ASTIHL's Obligations                              |  | 28
|                                                      | 6.4)  |    | Consequences of Non-consummation                                |  | 28
|ARTICLE 7    CLOSING                                  |       | 29
|                                                      | 7.1)  |    | Closing Date                                                    |  | 29
|                                                      | 7.2)  |    | Closing Deliveries of ASTIHL                                    |  | 29
|                                                      | 7.3)  |    | Closing Deliveries of August                                    |  | 29
|                                                      | 7.4)  |    | Proceedings                                                     |  | 29
|ARTICLE 8    POST-CLOSING COVENANTS                   |       | 29
|                                                      | 8.1)  |    | Further Assurances                                              |  | 29
|                                                      | 8.2)  |    | Litigation Support                                              |  | 29
|                                                      | 8.3)  |    | Insurance                                                       |  | 30

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|                                             | 8.4)   |    | Section 338 Election                               |  | 30
|-------------------------------------------- | ------ | -- | -------------------------------------------------- |  | --
|                                             | 8.5)   |    | Audit; Post-Closing Balance Sheet                  |  | 30
|ARTICLE 9    INDEMNIFICATION                 |        | 30
|                                             | 9.1)   |    | Indemnification of August                          |  | 30
|                                             | 9.2)   |    | Indemnification of ASTIHL                          |  | 31
|                                             | 9.3)   |    | Third-Party Claims                                 |  | 31
|                                             | 9.4)   |    | Waiver of Subrogation                              |  | 31
|                                             | 9.5)   |    | Cooperation as to Indemnified Liability            |  | 31
|                                             | 9.6)   |    | Offset                                             |  | 31
|                                             | 9.7)   |    | Release by ASTIHL                                  |  | 31
|                                             | 9.8)   |    | Limitations on Indemnification                     |  | 32
|ARTICLE 10    TERMINATION                    |        | 32
|                                             | 10.1)  |    | Termination                                        |  | 32
|                                             | 10.2)  |    | Procedure and Effect of Termination                |  | 33
|ARTICLE 11    REGISTRATION RIGHTS            |        | 33
|                                             | 11.1)  |    | Required Registration                              |  | 33
|                                             | 11.2)  |    | RegistrationGeneral Provisions                    |  | 33
|                                             | 11.3)  |    | Registration Expense                               |  | 34
|                                             | 11.4)  |    | Restrictions on Sales                              |  | 34
|                                             | 11.5)  |    | Suspensions on Sales                               |  | 35
|ARTICLE 12    ALTERNATIVE DISPUTE RESOLUTION |        | 35
|                                             | 12.1)  |    | Arbitration                                        |  | 35
|                                             | 12.2)  |    | Notice                                             |  | 35
|                                             | 12.3)  |    | Binding Arbitration                                |  | 36
|ARTICLE 13    OTHER PROVISIONS               |        | 37
|                                             | 13.1)  |    | ASTIHL Agreements                                  |  | 37
|                                             | 13.2)  |    | Termination of Prior Agreement; Complete Agreement |  | 38
|                                             | 13.3)  |    | Survival of Representations and Warranties         |  | 38
|                                             | 13.4)  |    | Waiver, Discharge, Amendment, Etc                  |  | 38
|                                             | 13.5)  |    | Notices                                            |  | 38
|                                             | 13.6)  |    | Public Announcement                                |  | 39
|                                             | 13.7)  |    | Expenses                                           |  | 39
|                                             | 13.8)  |    | Governing Law                                      |  | 39
|                                             | 13.9)  |    | Successors and Assigns                             |  | 39
|                                             | 13.10) |    | Titles and Headings; Construction                  |  | 39
|                                             | 13.11) |    | Benefit                                            |  | 40
|                                             | 13.12) |    | Counterparts                                       |  | 40

EXHIBITS:

Exhibit 5.7(a)
License Agreement
Exhibit 5.15    Release Agreement

SCHEDULES:

Schedule 3.1AReal
Property
Schedule 3.1BEquipment
Schedule 3.1CIntellectual Property
Schedule 3.1DCertain Leases, Agreements, Etc.
Schedule 3.1EPermits, Licenses, Etc.
Schedule 3.1FBanks and Depositories
Schedule 3.1GLoan and Credit Agreements, Etc.

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Schedule 3.1HInsurance Policies and Claims
Schedule 3.1ICertain Employees
Schedule 3.1JEmployee Plans
Schedule 3.1KPowers of Attorney
Schedule 3.1LTaxes
Schedule 3.1MMaterial Components
Schedule 3.2Organization Directors and Officers
Schedule 3.9Consents Required
Schedule 3.10Financial Statements
Schedule 3.12Undisclosed Liabilities
Schedule 3.13Absence of Certain Changes and Events
Schedule 3.15Trademarks, Patents and Trade Secrets
Schedule 3.16Accounts Receivable
Schedule 3.17Inventories
Schedule 3.19Litigation
Schedule 3.20Warranties
Schedule 3.26Contracts with Related Parties
Schedule 3.27Relations with Suppliers and Customers
Schedule 3.28Product Liability Claims
Schedule 3.29Environmental Matters
Schedule 3.33Employees
Schedule 3.34Agreements Restricting Business
Schedule 4.3August Consents Required
Schedule 5.12Distribution of Fixed Assets and Machining Equipment
Schedule 13.3Survival of Representations and Warranties

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SETTLEMENT AND PURCHASE AGREEMENT

THIS AGREEMENT is dated as of February 26, 2003 ("Execution Date"), by and amongAugust Technology
Corporation, a Minnesota corporation ("August"),Semiconductor Technologies & Instruments, Inc., a Delaware
corporation ("STI") andASTI Holdings Limited, a company incorporated in Singapore ("ASTIHL").

WHEREAS,
the parties had entered into an agreement dated May 23, 2002 (the "May 23 Agreement") for, inter alia, the sale by ASTIHL to August of all the issued and
outstanding shares of capital stock of STI.

WHEREAS,
the parties for various reasons did not complete the May 23 Agreement.

WHEREAS
the parties, without admission of any fault or liability under the May 23 Agreement, wish to enter into this Settlement and Purchase Agreement.

WHEREAS,
the Board of Directors of ASTIHL has approved the sale by ASTIHL to August of all of the issued and outstanding shares of capital stock of STI, upon the terms and subject to the
conditions set forth herein; and

WHEREAS,
the Board of Directors of ASTIHL has approved the license by ASTIHL to August of all technology, know how and intellectual property not owned by STI which is necessary to, or
currently used in, the Wafer Inspection Business, as defined herein; and

WHEREAS,
the parties hereto desire to make certain representations, warranties and agreements in connection with such sale of capital stock and transfer of technology and also to set
forth various conditions to such sale and transfer;

NOW,
THEREFORE, in consideration of the foregoing premises and the mutual representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:

ARTICLE 1  DEFINITIONS

1.1)Specific Definitions. As used in this Agreement, the following terms shall have the meanings set forth or as referenced
below:

"Affiliate" of any entity means any other entity that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the first entity. Control shall mean owning more than fifty percent (50%) of the total voting power of the entity or fifty percent (50%) or more of the
total capital interests of the entity.

"Agreement" means this Purchase Agreement and all Exhibits and Schedules hereto.

"ASTIHL" means as defined in the introductory paragraph.

"August" means as defined in the introductory paragraph.

"August Common Stock" means shares of common stock of August, no par value per share.

"August Filed SEC Documents" means as defined in Section 4.6.

"August SEC Documents" means as defined in Section 4.6.

"August Stock Price" means as defined in Section 2.5.

"Cash Portion" means as defined in Section 2.3

"Closing" and "Closing Date" have the meanings defined in Section 7.1.

"Closing Balance Sheet" has the meaning defined in Section 3.10.

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

"Employee Plans" means any health care plan or arrangement; life insurance or other death benefit plan; deferred compensation or other
pension or retirement plan; option, bonus or other incentive plan; severance, change of control or early retirement plan; or other fringe or employee benefit plan or arrangement; or any employment or
consulting contract or executive compensation agreement; whether the same are written or otherwise, formal or informal, voluntary or required by law or by STI's policies or practices, including,
without limitation, any "pension plan" as defined in Section 3(2) of ERISA that is not a Multiemployer Plan, and any "welfare plan" as defined in Section 3(1) of ERISA (whether or not
any of the foregoing is funded), (i) to which STI is a party or by which STI is bound; (ii) that STI has at any time established or maintained for the benefit of or relating to present
or former employees, leased employees, consultants, agents, and/or their dependents, or directors of STI; or (iii) with respect to which STI has made any payments or contributions.

"Environmental Laws or Regulations" means any one or more of the following: the Comprehensive Environmental Response, Compensation, and
Liability Act ("CERCLA") as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. § 9601 et seq.; the federal Resource Conservation and Recovery Act of
1976 ("RCRA"), 42 U.S.C. § 6921 et seq.; the Clean Water Act, 33 U.S.C. § 1321 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Hazardous Materials
Transportation Act, 40 U.S.C. § 1801 et seq.; any other federal, state, county, municipal, local or other statute, law, ordinance or regulation that may relate to pesticides, agricultural
or industrial chemicals, wastes, Hazardous Substances, or the environment; and all regulations promulgated by a regulatory body pursuant to any of the foregoing statutes, laws, regulations, or
ordinances.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

"Escrow Agent" means Wells Fargo Bank Minnesota, National Association, or such other party as shall be agreed upon prior to the Closing
Date.

"Escrow Agreement" means as defined in Section 2.4(b).

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"File Date" means as defined in Section 11.1.

"Financial Statements" means as defined in Section 3.10.

"Flextech" means Flextech Holdings Limited, a company incorporated in Singapore and the single largest shareholder of ASTIHL.

"GAAP" means the generally accepted accounting principles in the United States of America as in effect from time to time as set forth in
the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting
Standards Board as at the date on which any calculation made under this Agreement is to be effective or as at the date of the Financial Statements referred to in this Agreement, as the case may be.

"Governmental Entity" means any federal, state, local, or foreign administrative, governmental or regulatory body or authority whether in
the United States of America or in Singapore as the case may be.

"Hazardous Substance" means asbestos, urea formaldehyde, polychlorinated biphenyls, nuclear fuel or materials, chemical waste, radioactive
materials, explosives, known carcinogens, petroleum products, pesticides, fertilizers, or other substance that is toxic or hazardous, or which is a pollutant, contaminant, chemical, material or
substance defined as hazardous or toxic or as a pollutant or contaminant in, or

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the use, transportation, storage, release or disposal of which is regulated by, any Environmental Laws or Regulations.

"Intellectual Property" means letters patent and patent applications; trade names, trademarks, service marks and registrations thereof and
applications therefor; copyrights and copyright registrations and applications; and/or discoveries, ideas, technology, know-how, trade secrets, processes, formulas, business methods,
maskworks, drawings and designs, domain names, computer programs or software, hardware, firmware; and all amendments, modifications, and improvements to any of the foregoing.

"Inspection" is any vision technology other than automated vision alignment.

"Inventories" means finished goods, raw materials and work-in-process.

"Liens" means liens, mortgages, charges, security interests, claims, voting trusts, pledges, encumbrances, options, assessments,
restrictions, or third party or spousal interests of any nature.

"Material Adverse Effect" means any effect, change or event that, individually or in the aggregate with all other similar effects, changes
or events, is or would reasonably be expected to be adverse to STI, (i) in an amount exceeding $500,000 with respect to the business, financial condition, assets, liabilities or operations of
the Wafer Inspection Business, or (ii) such that the adverse effect to STI impairs the ability of August to own and operate the Wafer Inspection Business after the Closing as it is presently
being operated; provided, however, that a Material Adverse Effect shall not include a change in general economic or industry conditions.

"Multiemployer Plan" means as defined in Section 3(37) of ERISA.

"OEM Business" means the business activities of STI that relate to its OEM products or modules including, but not limited to, OEM 500 or
other like devices for strip CSP implied coplanarity inspection, OEM 750 or other like devices for pre-die sort patterned defect inspection, and OEM 1,000 or other like devices for
attachment to die sorters for inspection of wafers or film frames.

"Product Liability" means any liability, claim or expense (including attorneys' fees) arising in whole or in part out of a breach of any
product warranty (whether express or implied), strict liability in tort, negligent manufacture of product, negligent provision of services, product recall, or any other liability arising from the
manufacturing, packaging, labeling (including instructions for use), or sale of products.

"Purchase Price" means as defined in Section 2.3.

"Real Property" means as defined in Section 3.30.

"Registrable Stock" means as defined in Section 12.1.

"SEC" means the Securities and Exchange Commission, or any other federal agency at the time administering the Securities Act.

"Second Optical Inspection" is defined as the markets including wafer level inspection whether patterned or unpatterned wafer, bare wafer,
whole wafer, and sawn wafer on film frames.

"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

"Shares" means as defined in Section 3.3.

"STI" is Semiconductor Technologies & Instruments, Inc. of Plano, Texas, whereby STI represents ASTI's entire Second Optical
Inspection business which includes ASTI's wafer level and/or front end inspection business including but not limited to the entire WAV Business, OEM Business, white light interferometry technology, 2D
and 3D vision technology, and all other automated vision and inspection projects developed or worked on in Dallas, all relating to Second Optical Inspection and including related automation, software,
hardware, and handling.

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"Stock Portion" means as defined in Section 2.3.

"Taxes" means any tax or other primary, secondary or transferee liability including, without limitation, all income, profits, franchise,
gross receipts, withholding, payroll, sales, use, employment, value added, custom, duty, and any other taxes, obligations, and assessments of any kind whatsoever, together with all interest and
penalties, assessed or imposed by the United States of America, any of its political subdivisions, or any other governmental authority. "Tax" shall also include any liability arising as a result of
being (or ceasing to be) a member of any affiliated, consolidated, combined, or unitary group as well as any liability under any tax allocation, tax sharing, tax indemnity or similar agreement.

"Wafer Inspection Business" shall mean all of the rights, title and interest in and to ASTIHL's equity interests in STI
including all non-intercompany assets and liabilities of such entity, all subject to appropriate and applicable reserves and valuations, together with all technology, know how and
intellectual property not owned by STI which is necessary to operate, or currently used in, the area of Second Optical Inspection conducted by STI.

"WAV Business" means the business activities of STI that relate to the wafer inspection products which are also known as the WAV
Inspection Systems, including, but not limited to the following products: WAV1000, WAV1000B, WAV-1000 Sprint, and WAV-1000 STI Handler, each with or without any of the
following options: off-axis lighting for 2D gold and solder applications, lasers for 3D gold and solder applications, white light interferometry for 3D gold applications, ADC, cluster
analysis, SECS/GEM, ionizer, and 300 mm kit, and Technology useful or necessary to the design, production, or operation of these products.

1.2)Definitional Provisions.



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ARTICLE 2  PURCHASE AND SALE; PURCHASE PRICE

2.1)Purchase and Sale of Shares. Subject to the terms and conditions of this Agreement, effective as of the Closing, ASTIHL
shall sell, transfer and assign to August, and August shall purchase all of the Shares.

2.2)Purchase and Sale of Assets. Subject to the terms and conditions of this Agreement, and in order for August to acquire
certain assets necessary to operate the Wafer Inspection Business effective as of the Closing, STI Affiliates shall each sell, transfer and assign to August, and August shall purchase, all of their
respective assets and personal property related to or used in the operation of the Wafer Inspection Business in the past or up to the Closing Date, wherever the same may be located (collectively
referred to as the "Purchased Assets").

2.3)Purchase Price. The total consideration for the Shares and the Purchased Assets shall be calculated and paid as
described below. The "Purchase Price" shall consist of the following: the sum of (a) One Million Two Hundred Fifty Thousand U.S. Dollars ($1,250,000) (the "Cash Portion") plus (b) Two
Hundred Fifteen Thousand three Hundred and Eighty Five (215,385) shares of August Common Stock (the "Stock Portion") which is equal to the sum of One Million Four Hundred Thousand Dollars ($1,400,000)
divided by the August Stock Price as set forth below in Section 2.5. The Purchase Price shall be payable to ASTIHL in the manner described in Section 2.4.

2.4)Payment of Purchase Price.



2.5)August Stock Price and Adjustment. The August Stock Price shall be Six and One-Half U.S. Dollars ($6.50) per
share. An appropriate adjustment to the Stock Portion shall be made in the event that, prior to the Closing Date, the outstanding shares of August Common Stock, without new consideration, are changed
into or exchanged for a different number of shares or a different class by reason of any reorganization, reclassification, subdivision, recapitalization, split-up, combination, exchange of
shares, stock dividend or other similar transaction.

2.6)Tax Treatment. ASTIHL agrees to use best efforts to assist August in understanding and utilizing any and all net
operating loss ("NOL") related to the Wafer Inspection Business and ASTIHL shall not make any material changes to the NOL prior to closing except that certain intellectual

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property listed in Exhibit 3.1C, part (c), which is valued by ASTI at $1.52 million, may be transferred out of STI so long as the effect on the NOL does not exceed $608,000, and
ASTI agrees to make any election under the U.S. Internal Revenue Code Section 338 as requested by August.

ARTICLE 3  REPRESENTATIONS AND WARRANTIES OF STI AND ASTIHL

STI and ASTIHL jointly and severally represent and warrant to August as follows, and acknowledges that the same shall be true and correct as of the Closing Date
(as if made at the Closing) and shall be deemed to have been relied upon by August. For the sake of clarity, the parties acknowledge that the truth and accuracy of the representations and warranties
is not a closing condition of this agreement, but shall only entitle the non-defaulting party to pursue an action for monetary damages and such other remedies as may be available.

3.1)Listing of Certain Assets and Data. Attached hereto as Schedules 3.1A through 3.1M are lists, which are true and
complete as of the date hereof, of the matters set forth in the following subsections (a) through (m).



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3.2)Organization; Directors and Officers. STI is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has all necessary power and authority to own its properties and assets and conduct the business presently being conducted by it. STI is in good standing and is
qualified or licensed to transact business as a foreign corporation in each other jurisdiction in which the character of its properties or the nature of its activities makes any such qualification
necessary other than jurisdictions where the failure to be so qualified or licensed would not result in a
Material Adverse Effect. The jurisdictions in which STI is qualified are listed onSchedule 3.2. Schedule 3.2also sets forth a list of the
directors and officers (with all titles and positions indicated) of STI. STI has heretofore delivered
to August complete and correct copies of the Certificate of Incorporation and all amendments thereto, and of the Bylaws and all amendments thereto and any other governing documents or instruments.

3.3)Capitalization and Voting Rights. The authorized capital stock of STI consists, or will consist, immediately prior to
the Closing of 10,000 authorized shares of common stock, par value $.01 per share, of which 1,000 shares are issued and outstanding (the "Shares"). There are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal) or agreements, orally or in writing, for the purchase or acquisition from STI of any shares of its capital stock. STI is not a
party or subject to any agreement or understanding, and there is no agreement or understanding between any persons, which affects or relates to the voting or giving of written consents with respect to
any of STI's securities or the voting by a director of STI. All outstanding securities of STI were duly and validly authorized and issued, are fully paid and nonassessable, and were issued in
accordance with the registration or qualification provisions of the Securities Act, and any relevant state securities laws, including Blue Sky laws, or pursuant to valid exemptions therefrom, and in
accordance with the other applicable provisions of the Securities Act and the rules and regulations thereunder.

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3.4) This
section intentionally omitted

3.5)Authority of ASTIHL. ASTIHL has full legal and equitable right, power, and authority (without the consent or approval of
any other person other than ASTIHL's stockholders) to perform all of its obligations under this Agreement.

3.6)Ownership of Shares/Status of ASTIHL. ASTIHL is the sole legal and beneficial owner of the Shares free and clear of any
encumbrances or rights of others (other than the rights of August). There is no agreement, contract, option, commitment, right or privilege or other right of another binding upon or which at any time
in the future may become binding upon ASTIHL or STI to sell, transfer, assign, pledge, charge, mortgage or in any other way dispose of or encumber any of the Shares other than pursuant to this
Agreement. Without limiting the generality of the foregoing, none of the Shares are subject to any voting trust, shareholders' agreement, voting agreement or other agreement or understanding with
regard to the Shares. Upon completion of the transactions contemplated by this Agreement, the Shares will constitute all of the outstanding capital stock of STI and will be owned solely by August as
the owner of record, with good and marketable title thereto. There has not been filed any petition or application, or any proceedings commenced which have not been discharged, by or against any of
ASTIHL or STI with respect to any assets under any law, domestic or foreign, relating to bankruptcy, reorganization, compromise arrangements, insolvency, readjustment of debtor or creditors' rights,
and no assignment for the benefit of creditors has been made by ASTIHL or STI.

3.7)Subsidiaries. STI has no ownership or equity interest, direct or indirect, in any other business, corporation, joint
venture, partnership, proprietorship or similar entity. The business carried on by STI has not been conducted through any direct or indirect subsidiary or Affiliate of STI or ASTIHL, except that ASTI
Affiliates including STI California, Inc., Semiconductor Technologies & Instruments Pte Ltd, Semiconductor Technologies & Instruments Sdn Bhd, and Semiconductor
Technologies & Instruments Phils., Inc. have performed some of STI's marketing activities, and Semiconductor Technologies & Instruments Pte Ltd has performed engineering
development activities, and all such rights resulting therefrom are addressed in Section 5.7. Except as disclosed in Schedules 3.1I or 3.26, STI is not a party to any agreements, whether
written or oral, with ASTI or any Affiliates of ASTI regarding sales or service of STI products or any other aspect of STI's business.

3.8)Authorization and Binding Obligation. The execution, delivery and performance of this Agreement and the transactions and
agreements contemplated hereby have been duly and validly authorized and approved by all requisite corporate action on the part of STI and by all requisite action of ASTIHL, except that as of the date
of this Agreement ASTIHL's Shareholders have not approved this Agreement and the transactions contemplated hereby. This Agreement constitutes and, when executed, the agreements
contemplated hereby will constitute, the valid and binding obligations of STI and ASTIHL, enforceable in accordance with its and their respective terms except as may be limited by laws affecting
creditors rights generally or by judicial limitations on the right to specific performance or other equitable remedies.

3.9)Consents Required. Except for (i) any applicable requirements of the Securities Act, the Exchange Act, and
securities laws of the states of the United States of America; (ii) the Hart Scott Rodino Antitrust Improvements Act of 1976 and the regulations thereunder (the "HSR Act") and the antitrust,
competition, foreign investment, or similar laws of any foreign countries or supranational commissions or boards that require pre-transaction notifications or filings with respect to the
transactions contemplated by this Agreement (collectively, "Foreign Transaction Laws"), (iii) the shareholder approval and other requirements of the Stock Exchange of Singapore applicable to
ASTIHL, and (iv) any items set forth inSchedule 3.9, the execution and delivery of this Agreement,

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the sale and transfer of the Shares and the consummation of the transactions contemplated hereby in compliance with the terms and provisions hereof, by ASTIHL and STI will not:



3.10)Financial Statements. Attached asSchedule 3.10is
a true and complete copy of (i) STI's audited financial statements for the years ended December 31, 2000, and December 31, 2001 and (ii) STI's unaudited financial
statements for the nine month periods ended September 30, 2002 and 2001, (iii) not later than February 20, 2003 (and whether before or after the Closing), Schedule 3.10shall be
updated to add STI's audited financial statements for the years ended December 31, 2001 and December 31,
2002 and (iv) within 15 days of Closing, Schedule 3.10 shall be updated to include an unaudited balance sheet, prepared using the same principles and management judgments as the
audited statements, as of the Closing Date (the "Closing Balance Sheet") (collectively, (i), (ii), (iii) and (iv) are herein collectively referred to as the "Financial Statements"). All
the Financial Statements have been and shall be prepared in accordance with GAAP and fairly represent in all material respects the financial position of STI as of their respective dates and the
results of operations and cash flows for the applicable periods ended on such dates. The statements of earnings included within the Financial Statements do not contain any items of special or
nonrecurring income or any other income not earned in the ordinary course of business except as expressly specified therein. The books of account of STI accurately reflect STI's items of income and
expense and all assets and liabilities and accruals that properly should have been reflected therein in accordance with GAAP consistently applied throughout the periods covered thereby.

3.11)Taxes. STI has timely filed all tax or assessment reports and tax returns (including any applicable
information returns) that may be required by any law or regulation of any jurisdiction to be filed, and all such reports and returns are true, correct and complete in all material respects and listed
inSchedule 3.1L. STI has duly paid, deposited or accrued on its books of account, all Taxes pursuant to such reports and returns, or assessed
against STI, or which STI is obligated to withhold from amounts owing to any employee or otherwise. STI has no liability for any Taxes in excess of the amounts stated in the Financial Statements with
respect to all time periods or portions thereof ending on or before the dates thereof. Neither the assessment of any additional Taxes that by law should have been reported or paid or in accordance
with GAAP should have been accrued, nor any investigation or audit, is pending, threatened or expected. No taxing or assessment authority has indicated to STI any intent to conduct an audit or other
investigation or asserted any unresolved deficiencies with respect to Tax liabilities of STI for any period, and to STI's and ASTIHL's knowledge there are no facts or circumstances that
would give rise thereto. STI has not waived any statute of limitations in respect of any Taxes or agreed to any extension of time with respect to an assessment of deficiency with respect to such
Taxes. No tax is required to be withheld or paid pursuant to Section 1445 of the Code as a result of the transactions contemplated by this Agreement.

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3.12)Absence of Undisclosed Liabilities. There are no debts, liabilities, or claims against STI, or to STI's
knowledge a legal basis therefor, whether accrued, absolute, contingent, or otherwise, and whether due or to become due, including, but not limited to, liabilities on account of Taxes, other
governmental charges, duties, penalties, interest or fines, which are required to be reflected on the Financial Statements of STI in accordance with GAAP except:



And
as such, August assumes no other liabilities except as noted above in 3.12(a), 3.12(b) and 3.12(c).

3.13)Absence of Certain Changes and Events. Except as set forth in Schedule 3.13, since the date of the most recent Financial Statement:



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3.14)Assets. The fixtures, equipment, facilities and operating assets of STI are suitable for the uses for
which intended, free from material defects and in good operating condition (ordinary wear and tear excepted) in all material respects. All such assets are being and have been properly and regularly
serviced and maintained by STI in a manner that would not void or limit the coverage of any warranty thereon. STI has good, marketable and insurable title to, or, in the case of leases, valid and
subsisting leasehold interests in, all assets used in the Wafer Inspection Business, free and clear of any Liens except Liens for current taxes or assessments not yet due and payable.

3.15)Intellectual Property. Except as set forth in Schedule 3.15, all right, title and interest in and to all Intellectual Property that is necessary to or used in
(i) the Wafer Inspection
Business as presently conducted, and (ii) research and development programs of ASTIHL or STI relating to the Wafer Inspection Business, are owned by or licensed exclusively to, without
royalties, on-going fees or commissions, STI, free and clear of any Liens. Except as set forth inSchedule 3.15with specific
reference to this sentence, neither STI, the Wafer Inspection Business, the Intellectual Property owned by or licensed to STI nor any of the products of STI used in the Wafer Inspection Business,
infringes, misuses, or conflicts with the rights, including Intellectual Property rights, of others and, to STI's and ASTIHL's knowledge, there is no reasonable basis to suspect that
such infringement, misuse or conflict exists. No present or former employee or consultant of STI has violated any noncompetition, confidentiality, or assignment of inventions covenant or obligation by
reason of such employee's or consultant's employment with or consulting to ASTIHL or STI. None of the Intellectual Property used by STI was created using misappropriated Intellectual Property. No
present or former employee or consultant of STI has, by actions taken while an employee or consultant of STI, violated any covenant or obligation not to solicit the employees of any other person or
entity. The Intellectual Property
owned by or licensed to STI has not been challenged in any judicial or administrative proceeding. No employee or consultant of STI or an Affiliate of STI has any rights as an individual in or to any
of the Intellectual Property and no Affiliate of ASTIHL or STI has any rights in or to any of the Intellectual Property used in the Wafer Inspection Business. All Intellectual Property necessary to or
used in the Wafer Inspection Business is listed inSchedule 3.1Cand has the status indicated therein and all applications are still pending in
good standing and have not been abandoned. ASTIHL and STI have taken commercially reasonable steps and appropriate actions to record their interests, and protect their rights, in the Intellectual
Property. To STI's and ASTIHL's knowledge, no person or entity nor such person's or entity's business nor any of its products has infringed, misused, misappropriated or conflicted with
the Intellectual Property rights of STI or currently is infringing, misusing, misappropriating or conflicting with such rights and there is no reasonable basis to suspect that such infringement,
misuse or conflict exists. Except as set forth onSchedule 3.15, no employee or consultant of STI is subject to or otherwise restricted by any
employment, nondisclosure, assignment of inventions, nonsolicitation of employees or noncompetition agreement between such employee or consultant and a third party, except as set forth in
nondisclosure agreements executed on behalf of STI with third parties. Except as set forth onSchedule 3.15, all employees and consultants of STI
have signed a confidentiality and assignment of inventions agreement in the form attached hereto as part of

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Schedule 3.15, and, assuming due execution on the part of such employee or consultant, each such agreement is, and after the Closing shall remain, the legal, binding
and enforceable obligation of such employee or consultant.

3.16)Accounts Receivable. All accounts and notes receivable shown on the most recent Financial Statement and
all accounts and notes receivable created up to the Closing Date will be collected in the ordinary course of business (net of the allowance set forth or reflected in the Financial Statements for
doubtful accounts). All accounts and notes receivable shown on the most recent Financial Statement are, except to the extent already paid, valid and collectible obligations owing to STI, not subject
to any defenses or set-offs. STI has no notes or accounts receivable due to it from any director, officer, or employee. With respect to the accounts receivable set forth in the Financial
Statements, neither ASTIHL nor STI has made promises or other commitments which require additional engineering or modification of products delivered to customers except as otherwise disclosed in Schedule 3.16.

3.17)Inventories. All Inventories of STI consist of items of merchantable quality and quantity usable or
salable in the ordinary course of the Wafer Inspection Business, and are salable at prevailing market prices and do not have a value materially less than the book value amounts thereof. All
Inventories of STI conform to the specifications established therefor and all applicable regulatory requirements. The quantities of all Inventories (net of allowance for obsolete or excess inventory
consistent with past practice) are not obsolete, damaged, defective or excessive, and are reasonable in the circumstances of STI's Wafer Inspection Business. Schedule 3.17sets forth a complete
list of the addresses of all warehouses or other facilities owned or leased by STI, or at distributor or
customer locations, and in which the Inventories related to the Wafer Inspection Business are located.

3.18)Licenses; Compliance with Laws, Regulations, Etc. STI possesses all permits, licenses and other approvals
and authorizations that are necessary for the conduct of its business as presently conducted, and all of such licenses, permits and other approvals and authorizations are in good standing, full force
and effect. All such licenses, permits, approvals or authorizations will not be affected by the
transactions contemplated herein. STI and its respective actions, properties, products, practices and procedures, and any agreements to which STI is a party or is bound, have complied, and are in
compliance, in all respects with all applicable laws (including common law), statutes, ordinances, orders, decrees, rules, regulations, interpretations and requirements promulgated by governmental or
other authorities, except to the extent that any noncompliance would not have a Material Adverse Effect. To the best knowledge of ASTIHL, no statute, rule, regulation, order or interpretation has been
enacted, entered or deemed applicable by any domestic or foreign government or governmental or administrative agency or court that would make consummation by ASTIHL of the transactions contemplated by
this Agreement illegal.

3.19)Litigation. Except as set forth inSchedule 3.19,there is no action, lawsuit, claim, proceeding, or investigation of any kind pending or threatened against, by or affecting STI or the Wafer Inspection Business. STI is not in default with respect to
any order, writ, injunction, or decree of any court or of any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting or relating to its business or assets. No suit, action or other proceeding is pending or threatened by or before any court or governmental agency in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby, and no investigation that might result in any such suit,
action or other proceeding is pending or overtly threatened.

3.20)Warranties. All products manufactured or sold, and all services provided, by STI have complied, and are
in compliance, in all material respects with all contractual requirements, warranties or covenants, express or implied, applicable thereto, and with all applicable governmental, trade association or
regulatory specifications therefor or applicable thereto. The warranty reserve on the Financial Statements is determined in accordance with GAAP. The terms of the product and service

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warranties and product return, discount, demo sales and credit policies for STI are set forth inSchedule 3.20.

3.21)Leases, Contracts. STI has performed in all material respects the obligations required to be performed by
it and is not in default under any lease, contract, mortgage, promissory note, evidence of indebtedness, purchase order or other agreement or commitment to which STI is a party or by which STI is
bound, and the same are in full force and effect on the date hereof and valid and enforceable by STI in accordance with their respective terms except as may be limited by laws affecting creditors'
rights generally or by judicial limitations on the right to specific performance or other equitable remedies; there has not been any event of default (or any event or condition that with notice or the
lapse of time, both or otherwise, would constitute an event of default) on the part of STI or, to STI's knowledge, any party to any thereof; and neither the performance nor the breach by STI of any
such lease, contract, mortgage, promissory note, evidence of indebtedness or other agreement will have a Material Adverse Effect.

3.22)Insurance Policies. All policies of insurance listed in Schedule 3.1Hare in full force and effect, have been issued, directly or indirectly, for the benefit of
STI by properly licensed reputable
insurance carriers, are to STI's knowledge adequate for the assets, business and operations of STI. STI has
promptly and properly notified its insurance carriers of any and all claims known to it with respect to its operations or products for which it is insured. The insurance policies or substantially
similar policies applicable to STI have been in full force and effect since STI's inception.

3.23)Labor Agreements. STI is not a party to any collective bargaining agreement with any labor organization
or to any other agreement or understanding containing any severance pay or change of control liabilities or obligations. STI has not committed any unfair labor practice. There is not currently pending
or threatened a demand for recognition from any labor union with respect to, and STI has no knowledge of any attempt that has been made or is being made to organize, any of the persons employed by
STI. There has never been and is not now any strike, slow-down, work stoppage or lockout, or any threat thereof, by or with respect to any of the employees of STI. To STI's knowledge,
there has never been and is not now any strike, slow-down, work stoppage or lockout, or any threat thereof, by or with respect to any supplier of STI that has had, or could reasonably be
expected to have, a Material Adverse Effect upon the Wafer Inspection Business.

3.24)Benefit Plans.



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3.25)No Finders. No act of ASTIHL or STI has given or will give rise to any valid claim against any of the
parties hereto for a brokerage commission, finder's fee or other like payment in connection with the transactions contemplated herein.

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3.26)Contracts with Related Parties. Except as set forth inSchedules
3.1Ior3.26, there are no agreements or contracts between STI and any of its officers, directors, shareholders or any entity in
which any officer, director or shareholder owns a more than five percent (5%) equity interest and no agreements or contracts between STI and its Affiliates.

3.27)Relations with Suppliers and Customers. No current supplier of STI has cancelled any contract or order
for provision of, and, to STI's knowledge, there has been no threat by any such supplier not to provide, raw materials, products, supplies, or services to the businesses of STI either prior to or
following the Closing. Except as set forth inSchedule 3.27, STI has not received any information from any customer to the effect that such
customer intends to materially decrease the amount of business it does with STI either prior to or following the Closing. ASTIHL agrees to update Schedule 3.27by Closing to list all material
suppliers to STI of any manufacturing or processing raw materials, products, supplies, or services,
including names and telephone numbers of contact persons.

3.28)Product Liability Claims. All products that STI has in Inventory or has sold have been and are
merchantable, free from material defects in material or workmanship, and suitable for the purpose for which they are sold and meet the customer specifications or other contractual requirements with
respect to the sales order or purchase order for such product. Except as set forth inSchedule 3.28, STI has not incurred any uninsured or
insured Product Liability and ASTIHL has not incurred any uninsured or insured Product Liability with respect to the Wafer Inspection Business. Except as set forth in Schedule 3.28, STI has not
received a claim based upon alleged Product Liability, and, to STI's and ASTIHL's knowledge, no basis
for any such claim exists. Except as set forth inSchedule 3.28, ASTIHL has not received a claim based upon alleged Product Liability with
respect to the Wafer Inspection Business, and, to STI's and ASTIHL's knowledge, no basis for any such claim exists. To STI's and ASTIHL's knowledge, STI has no liability
or obligation with respect to any Product Liability, whether or not heretofore asserted, or product recalls related to products manufactured, sold, or leased prior the Closing.

3.29)Environmental Matters. Except as set forth on Schedule 3.29, STI has obtained, and is in compliance with, all permits, licenses or other approvals necessary under
the Environmental Laws or
Regulations with respect to STI's business or assets, and is in compliance with all Environmental Laws or Regulations applicable to STI's business or assets, except to the extent that any
noncompliance would not have a Material Adverse Effect. The business and assets of STI comply with all such Environmental Laws or Regulations. Schedule 3.29sets forth all Hazardous Substances that
have been used, stored, manufactured, generated, transported, released or disposed of in
connection with or as a result of the business or assets of STI, and such Hazardous Substances have been used by STI in compliance with applicable Environmental Laws and Regulations. Neither STI, nor
its business, assets or the real property presently or formerly used by STI in connection therewith, have been or are subject to, any
actual or threatened investigations, administrative proceedings, litigation, remedial action, regulatory hearings, or other action threatened, proposed or pending that alleges (i) actual or
threatened violation of or noncompliance with any Environmental Law or Regulation; or (ii) actual or threatened personal injury, property damage, contamination, responsibility or liability of
any kind resulting from on-site exposures to, off-site treatment, storage or disposal of, or release or threatened release of a Hazardous Substance. STI has not taken any
action or failed to take any action with respect to its business, assets or the real property presently or formerly used by STI in connection therewith that might reasonably be expected to result in
(i) actual or threatened violation of or noncompliance with any Environmental Law or Regulation; or (ii) actual or threatened personal injury, property damage, contamination,
responsibility or liability of any kind resulting from on-site exposures to off-site treatment, storage or disposal of, or release or threatened release of a Hazardous
Substance. STI has delivered to August, or given August access to, true and complete copies of all (if any) reports, studies or tests in the possession of or initiated by STI that pertain to Hazardous
Substances or other environmental concerns regarding the business or assets of STI or any real property used by STI in

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connection with its business or assets. With respect to the real property presently or formerly used in connection with the business and assets of STI, (i) no above-ground or underground
storage tanks are or were present on such real property or any improvements on structures thereon; (ii) such real property is not listed on the federal CERCLIS or on any local, state or federal
list of hazardous waste sites; and (iii) no Lien in favor of any governmental authority in response to a release or threatened release of any Hazardous Substance has been filed or attached to
such real property.

3.30)Location of Real Property.Schedule 3.1Asets
forth an address and a complete and accurate legal description of all the Real Property owned and/or leased by STI (the "Real Property"). STI legally or beneficially owns or leases, and has not agreed
to acquire or lease any real property or any interest in any real property, other than the Real Property.

3.31)Title to Real Property. STI has the exclusive right to possess, use and occupy all the Real Property
owned or leased by it, free and clear of all Liens.

3.32)Business and Marketing Plans. STI has made available to August all material methods, plans or marketing
programs employed by STI in connection with its business, including, but not limited to, all strategic and long term plans or goals.

3.33)Employees.



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3.34)Agreements Restricting Business. Except as disclosed in Schedule 3.34, STI is not a party to any agreement or arrangement which restricts the freedom of STI to
carry on its business, including any
contract or agreement which contains covenants by STI not to compete in any line of business with any other person.

3.35)Corporate Records. The minute books of STI, copies of which have been provided to August, contain
complete copies of the Certificate of Incorporation of STI and its By-Laws, together with
accurate and complete minutes of all meetings and resolutions of STI's Board of Directors and shareholders held or passed, enacted, consented to or adopted since incorporation. There are no
outstanding or pending applications or filings which would alter in any way the Certificate of Incorporation or corporate status of STI. All resolutions of STI were duly passed and all meetings of STI
were duly held, and the share certificate books and share certificate registers are complete and accurate and shall reflect all transactions contemplated by this Agreement. The corporate records of
STI have been maintained in all material respects in accordance with all applicable statutory requirements and are complete and accurate.

3.36)Propriety of Past Payments. No funds or assets of STI have been used for illegal purposes. Except for
intercompany loans to be satisfied or converted to equity pursuant to Section 5.12, all financial transactions by or on behalf of STI have been duly and properly recorded and accounted for in
STI's books and records and no false or artificial entry has been made in the books and records of STI for any reason. No payment has been made by or on behalf of STI with the understanding that any
part of such payment is to be used for any purpose other than that described in the documents supporting such payment or in the event that there are no documents supporting such payment, then for
valid business purposes. STI has not made, directly or indirectly, any illegal contributions to any political party or candidate or government official, either domestic or foreign.

3.37)Investment Representations.



3.38)Completeness of Disclosures. None of the representations or warranties made by ASTIHL and STI in this
Agreement, and no certificate or Schedule furnished or to be furnished by or on behalf of STI or ASTIHL to August pursuant to this Agreement, or in connection with the transactions contemplated by
this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit any material fact the omission of which would be misleading in light of the circumstances under
which they were made.

3.39)No Implied Representations. It is the explicit intent of the parties hereto that STI and ASTIHL are not
making any representation or warranties whatsoever, expressed or implied, except those representations and warranties of STI and ASTIHL contained in this Agreement, the Schedules attached hereto, or
the certificates to be provided by STI and ASTIHL pursuant to this Agreement (the "ASTIHL's Certificates").

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ARTICLE 4  REPRESENTATIONS AND WARRANTIES OF AUGUST

August represents and warrants to ASTIHL as follows, and acknowledges that the same shall be true and correct as of the Closing Date (as if made at the Closing)
and shall be deemed to have been relied upon by ASTIHL. For the sake of clarity, the parties acknowledge that the truth and accuracy of the representations and warranties is not a closing condition of
this agreement, but shall only entitle the non-defaulting party to pursue an action for monetary damages and such other remedies as may be available.

4.1)Organization. August is a corporation duly organized, validly existing and in good standing under the laws of the State
of Minnesota.

4.2)Authorization and Binding Obligation. The execution, delivery and performance by August of this Agreement and the
transactions contemplated hereby has been duly and validly authorized and approved, by all requisite corporate action on the part of August. August has all requisite power and authority to do and
perform all acts and things required to be done by it under this Agreement and the agreements contemplated hereby. This Agreement constitutes the valid and binding obligation of August enforceable in
accordance with its terms except as may be limited by laws affecting creditors' rights generally or by judicial limitations on the right to specific performance.

4.3)Consents Required. Except for (i) any applicable requirements of the Securities Act, the Exchange Act and
securities laws of the states of the United States of America; (ii) the HSR Act and the Foreign Transaction Laws, and (ii) any items set forth in Schedule 4.3, the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby in compliance with the
terms and provisions hereof by August will not:



4.4)No Finders. To the knowledge of August, no act of August has given or will give rise to any valid claim against ASTIHL
for a brokerage commission, finder's fee or other like payment in connection with the transactions contemplated herein.

4.5)Capital Stock. As of the opening of the market on the date of this Agreement, the authorized stock of August consists of
45,000,000 shares of common stock, no par value per share, 13,163,592 of which are issued and outstanding, validly issued, fully paid, and nonassessable.

4.6)SEC Documents. August has filed all required reports, schedules, forms, statements and other documents with the SEC
since June 13, 2000 (the "August SEC Documents"). As of their respective dates, August SEC Documents complied as to form in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such August SEC Documents, and none of August SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact

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required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Except to the extent that information
contained in any August SEC Document has been revised or superseded by a later-filed August SEC Document, filed and publicly available prior to the date of this Agreement (the "August Filed SEC
Documents"), as of the date of this Agreement none of August SEC Documents contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of August included in August SEC Documents
complied as of their respective dates of filing with the SEC as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP (except, in the case of unaudited statements, as permitted by Form 10-Q of the Exchange Act) applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and fairly present the consolidated financial position of August as of the dates thereof and the consolidated results of its
operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in August Filed SEC
Documents, and except for liabilities and obligations incurred in the ordinary course of business consistent with past practice, August has no liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a consolidated balance sheet of August or in the notes thereto which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect on August.

4.7)Absence of Certain Changes of Events. Except as disclosed in August Filed SEC Documents, and except as expressly
contemplated by this Agreement, since the date of the most recent financial statements included in August Filed SEC Documents, August has conducted its business only in the ordinary course, and there
has not been:



4.8)Issuance of August Common Stock. The August Common Stock issued to ASTIHL pursuant to this Agreement shall be, when
issued in accordance with the terms hereof, duly authorized, validly issued, fully-paid, nonassessable, and shall share equally in all dividends declared or paid by August

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after the Closing Date with the existing issued August Common Stock. The August Common Stock shall be issued in compliance with all applicable federal and state securities laws.

4.9)Completeness of Disclosures. None of the representations or warranties made by August in this Agreement, and no written
statement, certificate or Schedule furnished or to be furnished by or on behalf of August to ASTIHL pursuant to this Agreement, or in connection with the transaction contemplated by this Agreement,
contains or will contain any untrue statement of a material fact or omits or will omit any material fact the omission of which would be misleading in light of the circumstances under which they were
made.

4.10)No Implied Representations. It is the explicit intent of the parties hereto that August is not making any
representation or warranty whatsoever, expressed or implied, except those representations and warranties of August contained in this Agreement, the Schedules attached hereto, or the certificates to be
provided by August pursuant to this Agreement (the "August Certificates").

ARTICLE 5  PRE-CLOSING COVENANTS

5.1)Approvals and Consents. ASTIHL and STI will use all commercially reasonable efforts to obtain all approvals and consents
of all third parties necessary on the part of ASTIHL and STI to consummate the transactions contemplated herein. August agrees to cooperate with ASTIHL and STI in connection with obtaining such
approvals and consents. August will use all commercially reasonable efforts to obtain all approvals and consents of all third parties necessary on the part of August to consummate the transactions
contemplated herein. ASTIHL agrees to cooperate with August, and to cause STI to cooperate with August in connection with obtaining such approvals and consents.

5.2)Preserve Accuracy of Representations and Warranties. ASTIHL and STI shall refrain from taking any action, except with
the prior written consent of August, that would render any representation, warranty or agreement of ASTIHL in this Agreement inaccurate or breached as of the Closing (as though made at and as of the
Closing) in any material respect. At all times prior to the Closing, ASTIHL will promptly inform August in writing with respect to any matters hereafter arising that, if existing or occurring at the
date of this Agreement, would have been required to be set forth or described in the Schedules pursuant to Article 3. August shall refrain from taking any action, except with the prior written
consent of ASTIHL, that would render any representation, warranty or agreement of August in
this Agreement inaccurate or breached as of the Closing (as though made at and as of the Closing) in any material respect.

5.3)Maintain the Business as Going Concern. Except as contemplated by this Agreement, during the period from the date of
this Agreement to the Closing Date, STI will conduct its operations, according to its ordinary and usual course of business and consistent with past practice, and STI will use all commercially
reasonable efforts, to the extent that it is within its control, to preserve intact the business organization of STI, to maintain its prospects, to keep available the services of its officers and
employees and to maintain satisfactory relationships with licensors, licensees, suppliers, contractors, distributors, customers and others having business relationships with it. ASTIHL will promptly
advise August orally and in writing of any materially adverse change in the business, prospects, properties, results of operations or condition (financial or otherwise) of STI and permit August to
consult with ASTIHL or STI with respect to any material changes in the Wafer Inspection Business. Without limiting the generality of the foregoing, and except as otherwise expressly provided in or
contemplated by this Agreement or to the extent specifically disclosed on the Schedules hereto, during the period from the date hereof to the Closing Date, STI will not, without the prior written
consent of August:



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5.4)No Solicitation of Other Offers. Neither ASTIHL nor STI, nor any of their officers, directors, agents or Affiliates
(including Flextech) shall solicit, entertain, discuss or consider any offer, inquiry or proposal with respect to the direct or indirect sale, merger or other acquisition or licensing of the Wafer
Inspection Business (or any material portion or items thereof) or of any outstanding Shares by any third party other than August. Notwithstanding the foregoing, ASTIHL shall not be prohibited from
soliciting, negotiating, entering into an agreement regarding and consummating a transaction for, the sale, merger or license of any business or assets of ASTIHL not included in the Wafer Inspection
Business.

5.5)Access to Information and Records Before Closing. During the period from the date hereof to the Closing Date, STI shall
afford to August, and to August's accountants, officers, directors, employees, counsel and other representatives, unencumbered access during normal Wafer Inspection Business hours, to all of its
properties, books, contracts, commitments and records, and, during such period, ASTIHL and STI shall furnish promptly to August all information concerning the Wafer Inspection Business, prospects,
properties, results of operations, condition (financial or otherwise) or personnel of STI as August may reasonably request. During the period from the date hereof to the Closing Date, the parties
shall in good faith meet and correspond on a regular basis for mutual consultation concerning the conduct of the Wafer Inspection Business and, in connection therewith, August shall be
entitled to have employees or other representatives present at the offices of STI at all such times as reasonably deemed necessary by August to protect its interest as a prospective owner of the Wafer
Inspection Business and to observe, and be kept informed concerning, the operations and business planning of STI. August shall hold in confidence all such nonpublic information in accordance with the
Confidentiality Agreement dated February 28, 2002. August agrees to use best efforts to minimize disruptions to the Corporation, and not to interfere in the management, operations and business
of the Corporation prior to the Closing Date.

5.6)Approval of ASTIHL. To induce August to enter into this Agreement, ASTIHL, represents and agrees: (i) this
Agreement and the transactions contemplated hereby require the approval of the board of directors and may also require the approval of the shareholders of ASTIHL; (ii) the board of directors of
ASTIHL has approved this Agreement and the transactions contemplated hereby and resolved to submit this Agreement and the transactions contemplated hereby to a vote of its shareholders, to the extent
required by applicable law, with a recommendation that such shareholders

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approve this Agreement and the transactions contemplated hereby; and (iii) to the extent required by applicable law, ASTIHL agrees to use its best commercial efforts to convene a general
meeting of its shareholders to seek and obtain the approval of its shareholders of this Agreement and the transactions contemplated hereby as soon as reasonably practicable and to take any and all
other action as may be necessary or appropriate to obtain such board or shareholder approval as may be necessary to consummate the transactions contemplated hereby.

5.7)Intellectual Property Transfers.



5.8)Transfer by Related Parties. Prior to the Closing Date, all right, title and interest in and to the Wafer Inspection
Business that is held by an Affiliate of ASTIHL or an Affiliate of STI or any third party shall be transferred to STI in a form acceptable to August. Prior to the Closing, all right, title and
interest in and to any assets not relating to the Wafer Inspection Business that are held by STI shall be transferred to ASTIHL or an Affiliate of ASTIHL or any third party so designated by ASTIHL.

5.9)Additional Financial Statements and Reports. As soon as reasonably practicable, ASTIHL shall furnish to August copies of
all balance sheets and related statements of income, changes in financial position and changes in equity of STI that may be regularly prepared in the ordinary course of business, after the date hereof
and prior to the Closing Date, including but not limited to monthly balance sheets and related statements of income and quarterly balance sheets and related statements of income, changes in financial
position and changes in equity. Such financial statements will be prepared in conformity with GAAP applied on a consistent basis and fairly present the financial condition, results of operations and
changes in financial position of STI (subject, in the case of unaudited financial statements, to the absence of complete footnotes thereto), as of the dates and for the periods covered by such
statements.

5.10)Certain Notifications. ASTIHL shall promptly notify August in writing of the occurrence of any event that
will or could reasonably be expected to result in the failure to satisfy any of the conditions specified in Article 6.

5.11)Intercompany Debts. On or prior to Closing, ASTIHL and STI shall have caused all of the liabilities of
STI to ASTIHL, and their Affiliates to be satisfied or converted to equity such that ASTIHL remains the sole shareholder of STI and STI shall have received releases from such parties with respect to
the intercompany loan balances both in a manner that August may deem appropriate in its sole discretion. ASTIHL shall take August's instructions on how to achieve this in a manner which will eliminate
any possible tax consequences to STI.

5.12)Distribution of the Fixed Assets Related to Machining Equipment. On or prior to Closing Date, STI shall
distribute the fixed assets related to the machining equipment associated with machining and

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milling parts set forth on the attachedSchedule 5.12to ASTIHL and/or its Affiliates as a reduction of the intercompany loan balances based on
the net tax basis of such assets.

5.13)Audit Reports. ASTIHL shall provide to August financial statements of STI prepared in accordance with
GAAP, (i) on or prior to the Execution Date, for the years ended December 31, 2000 and December 31, 2001 audited by a firm of independent public accountants of recognized
international standing, (ii) on or prior to the Execution Date, for the nine months ended September 30, 2002 and 2001, which nine month statements shall be unaudited financial statements
of STI and (iii) no later than February 20, 2003 (whether before or after the Closing), financial statements for the years ended December 31, 2001 and December 31, 2002
audited by a firm of independent public accountants of recognized international standing. All financial statements in 5.13(i), (ii) and (iii), shall be prepared in accordance with and in a form
that will enable August to satisfy SEC requirements regarding the filing of financial statements of STI, as determined by August and August's accountants. ASTIHL acknowledges that the financial
statements required by this Section 5.13 are those necessary for August
to comply with its filing obligations under the rules of the Exchange Act and that to the extent August notifies ASTIHL in writing referencing this Section 5.13 that such filing obligations
require less or more than the financial information identified here, ASTIHL shall provide to August on or prior to the Closing such financial information as may be required in accordance with the
Exchange Act rules. At the time each of the financial statements noted in Section 5.13 are provided to August, ASTI shall provide a reconciliation of STI's internal general ledger to the
balances reflected on the audited statements as of December 31, 2001 and 2002 and to the unaudited statements as of September 30, 2002 and the Closing Balance Sheet. Concurrently, ASTI
shall provide detailed account reconciliations of all balances on such statements.

5.14)Termination of Lease. Immediately prior to or concurrently with the Closing, ASTIHL shall pay $1,128,000
to Second Century Investments and thereby terminate STI's lease dated March 9, 1999 and amended October 8, 1999 and April 27, 2000. ASTIHL and August shall take all other actions
as are necessary to terminate this STI lease in accordance with the STI Lease Termination Agreement with 190/STI, L.P and its affiliates including Second Century Investments dated concurrent herewith
and ASTIHL shall indemnify and hold harmless August from any remaining liability thereon.

5.15)Release Agreement. On or prior to the Closing Date, ASTIHL and Flextech shall execute and deliver a
Release and Assurance Agreement substantially in the form attached hereto asExhibit 5.15(the "Release Agreement").

5.16)Tax Matters.



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5.17)Employees. On or prior to the Closing, STI shall have reduced its workforce to not more than 15 key
employees and shall consult with August and comply with instructions of August regarding the employees to be retained and the manner in which other employees are terminated. ASTIHL and STI shall
effect all reductions in workforce by STI contemplated by this Section 5.17 under the guidance of competent legal counsel and in full compliance with all applicable laws and regulations,
including but not limited to COBRA and federal and state plant closing/mass layoff laws, if applicable, and ASTIHL assumes any and all liability associated therewith.

5.18)Fees and Expenses. Immediately prior to or concurrently with the Closing, ASTIHL shall pay any and all
obligations of STI with respect to any outstanding amounts owed for compensation or severance to the employees terminated in connection with Section 5.17. ASTIHL warrants that it has or will
pay ASTIHL's legal counsel and accountants, and shall not require STI to pay, any and all fees and expenses payable to such party in connection with the transactions contemplated by
this Agreement or services rendered related to this Agreement, except for those payments which August has agreed to make pursuant to Section 13.7.

5.19)Further Actions. Subject to the terms and conditions herein provided and without being required to waive
any conditions herein, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this Agreement. ASTIHL, STI and
August will use all reasonable efforts to obtain such governmental or regulatory approvals as they deem necessary or appropriate for the consummation of the transactions contemplated hereby.

5.20)Benefit Plans.



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5.21)Initial Funding Deposit. ASTIHL shall deposit enough cash on the Closing Date to cover any outstanding
checks or wire transfers, including payments required in 5.22.

5.22)Payment of Accounts Payable and Other Liabilities. Prior to the Closing Date ASTIHL shall cause STI to
pay (i) all accounts payable and other liabilities that are in excess of 30 days past due as of the Closing Date and (ii) all non-inventory accounts payable and other
liabilities owed to vendors as of the Closing Date.

5.23)Right of First Refusal Agreement. On or prior to the Closing Date, ASTIHL shall execute and deliver a
Right of First Refusal Agreement substantially in the form attached hereto asExhibit 5.23(the "First Refusal Agreement").

ARTICLE 6  CLOSING CONDITIONS

6.1)Conditions to Obligations of August and ASTIHL. The respective obligations of each party to consummate the transactions
contemplated by this Agreement to occur on the Closing Date will be subject to the satisfaction at or prior to the Closing Date of the following conditions, any or all of which may be waived by the
party for whose benefit such conditions exist, in whole or in part, to the extent permitted by applicable law:



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6.2)Conditions to August's Obligations. The obligations of August under this Agreement shall, at its option, be subject to
the satisfaction, on or prior to the Closing Date, of all of the following additional conditions:



6.3)Conditions to ASTIHL's Obligations. The obligations of ASTIHL under this Agreement shall, at its option,
be subject to the satisfaction, on or prior to the Closing Date, of all of the following additional conditions:



6.4)Consequences of Non-consummation. If the transactions contemplated by this agreement are not fully
consummated by Closing Date for any reason whatsoever, all parties shall immediately proceed to binding arbitration in accordance with Article 12 of the May 23 Agreement to resolve all
claims, disputes, controversies, and other matters in question arising out of or relating to this Agreement and the May 23 Agreement, including claims for Indemnifiable Losses and disputes
regarding the making of this Agreement or the May 23 Agreement or both, including claims of fraud in the inducement, or to the alleged breach of the May 23 Agreement or this Agreement or
both. The parties agree that in such an event, the ninety day period stipulated in Article 12.1 of the May 23 Agreement shall be deemed to be exhausted and that the Notice of demand for
arbitration dated September 9, 2002, from ASTIHL to August shall be deemed to have been served on August 28 days prior to Closing Date.

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ARTICLE 7  CLOSING

7.1)Closing Date.The consummation of the transactions provided for herein (the "Closing") shall take place at
10:00 a.m. (local time) on February 25, 2003 (provided the conditions to the parties' obligations are satisfied by such date), or on such other date and/or at such other time as the
parties hereto may agree upon (the "Closing Date") and neither party may unreasonably object to such changes so long as it is prior to March 31, 2003. The Closing shall take place at the
offices of STI, or at such other place or in such other manner (e.g., by telecopy exchange of signature pages with originals to follow by overnight delivery) as the parties hereto may agree.

7.2)Closing Deliveries of ASTIHL.In addition to, and without limiting any other provisions of this Agreement,
ASTIHL shall deliver or cause to be delivered the items listed below, in form reasonably satisfactory to August and its counsel:



7.3)Closing Deliveries of August.In addition to, and without limiting any other provisions of this Agreement,
August shall deliver or cause to be delivered the items listed below to ASTIHL and/or the Escrow Agent, as the case may be, in form reasonably satisfactory to ASTIHL and its counsel:



7.4)Proceedings.All proceedings taken and all documents executed and delivered by the parties hereto at the
Closing shall be deemed to have been taken and executed simultaneously and no proceedings shall be deemed taken nor any documents executed or delivered until all have been taken, executed and
delivered.

ARTICLE 8  POST-CLOSING COVENANTS

8.1)Further Assurances.At any time and from time to time after the Closing Date, each party shall, upon
request of the other party, execute, acknowledge and deliver all such further and other assurances and documents, and will take such action consistent with the terms of this Agreement as may be
reasonably requested to carry out the transactions contemplated in this Agreement.

8.2)Litigation Support.In the event and for so long as any party is actively contesting or defending against
any claim, suit, action or charge, complaint, or demand in connection with (i) any transaction contemplated under this Agreement or (ii) any fact, circumstance, status, condition,
activity,

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practice, occurrence, event, action, failure to act, or transaction on or prior to the Closing Date involving STI, each of the other parties will cooperate and make available themselves or their
personnel, as applicable, and provide such testimony and access to their books and records as shall be necessary in connection with the contest or defense, all at the expense of the party making the a
request for such testimony and access.

8.3)Insurance.August shall have no obligation to maintain any insurance coverage with respect to STI or its
business.

8.4)Section 338 Election.Following the Closing, ASTIHL shall take any further actions as may be
requested by August which are required to comply with the provisions set forth in Section 5.16.

8.5)Audit; Post-Closing Balance Sheet.Following the Closing, ASTIHL shall take all actions
necessary or appropriate, including paying any and all fees for the accounting firm engaged by STI, to cause the audit of STI's financial statements as of December 31, 2001 and
December 31, 2002 and for the year then ended to be completed and an audit report on such financial statements issued by a nationally recognized independent accounting firm before
February 20, 2003. Within 15 days of Closing, ASTI shall updateSchedule 3.10to include an unaudited balance sheet, prepared using
the same principles and management judgments as STI's audited financial statements, as of the Closing Date (the "Closing Balance Sheet").

ARTICLE 9  INDEMNIFICATION

9.1)Indemnification of August.From and after the Closing and subject to provisions of Section 9.8,
ASTIHL shall indemnify, defend and hold harmless August and each of its Affiliates (including STI), and their officers, directors and employees (August and such other indemnities referred to in this
Article 9 as "August Affiliates"), from and against and in respect of any and all demands, claims, actions or causes of action, assessments, losses, damages, liabilities, interest and
penalties, costs and expenses (including, without limitation, reasonable legal fees and disbursements incurred in connection therewith and in seeking indemnification therefor, and any amounts or
expenses required to be paid or incurred in connection with any action, suit, proceeding, claim, appeal, demand, assessment or judgment) (collectively, "Indemnifiable Losses"), resulting from, arising
out of, or imposed upon or incurred by any person to be indemnified hereunder by reason of any of the following:



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For
purposes of this Article, the amount of any Indemnifiable Loss shall be calculated without deduction for the $500,000 threshold set forth in the definition of Material Adverse Effect
or any other deduction based on materiality qualifiers or materiality adjustments.

9.2)Indemnification of ASTIHL.August shall indemnify, defend and hold harmless ASTIHL and its officers,
directors and employees for any Indemnifiable Losses resulting from, arising out of, or imposed upon or incurred by ASTIHL by reason of any breach of any representation, warranty, covenant or
agreement of August contained in this Agreement or any agreement, certificate or document executed and delivered by August pursuant hereto or in connection with the transactions contemplated by this
Agreement.

9.3)Third-Party Claims.If a claim by a third party is made against an indemnified party and if the indemnified
party intends to seek indemnity with respect thereto under this Article 9, such indemnified party shall promptly notify the indemnifying party of such claim; provided, however, that failure to
give timely notice shall not affect the rights of the indemnified party so long as the failure to give timely notice does not adversely affect the indemnifying party's ability to defend such claim
against a third party. The indemnified party shall not settle such claim without the consent of the indemnifying party,
which consent shall not be unreasonably withheld or delayed. If the indemnifying party acknowledges in writing its indemnity obligations for Indemnifiable Losses resulting therefrom, the indemnifying
party may participate at its own cost and expense in the settlement or defense of any claim for which indemnification is sought; provided that, such settlement or defense shall be controlled by the
indemnified party.

9.4)Waiver of Subrogation.From and after the Closing, ASTIHL and its Affiliates shall not have any rights to
indemnification, contribution or subrogation from August, STI or their successors, whether pursuant to August's, STI's or their successors' Certificate of Incorporation, Bylaws or other governing
instruments, insurance policies or otherwise, with respect to acts or events that give rise to a claim by August Affiliates under Section 9.1.

9.5)Cooperation as to Indemnified Liability.Each party hereto shall cooperate fully with the other parties
with respect to reasonable access to books, records, or other documentation within such party's control, if deemed reasonably necessary or appropriate by any party in the defense of any claim that may
give rise to indemnification hereunder.

9.6)Offset.In the event that ASTIHL shall fail to pay to August when due any amount under this
Article 9, August shall have the right to offset such amount against any amount then owing or thereafter becoming due by August or any of its Affiliates to ASTIHL or its Affiliates.

9.7)Release by ASTIHL.Effective as of the Closing Date, ASTIHL shall be deemed to have released, and hereby
releases, STI and its directors, officers, agents and employees, and discharges them from, any and all obligations and claims that have arisen or might arise out of facts or actions taken on or prior
to the Closing Date, including those known and unknown, in law or equity, except obligations or claims that may be made under this Agreement or any instruments entered into or delivered pursuant to
this Agreement.

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9.8)Limitations on Indemnification.



ARTICLE 10  TERMINATION

10.1)Termination.This Agreement may be terminated at any time prior to the Closing Date, only:



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10.2)Procedure and Effect of Termination.If the transactions contemplated by this agreement are not fully
consummated by Closing Date for any reason whatsoever, all parties shall immediately proceed to binding arbitration in accordance with Article 12 of the May 23 Agreement to resolve all
claims, disputes, controversies, and other matters in question arising out of or relating to this Agreement and the May 23 Agreement, including claims for Indemnifiable Losses and disputes
regarding the making of this Agreement or the May 23 Agreement or both, including claims of fraud in the inducement, or to the alleged breach of the May 23 Agreement or this Agreement or
both. The parties agree that in such an event, the ninety day period stipulated in Article 12.1 of the May 23 Agreement shall be deemed to be exhausted and that the Notice of demand for
arbitration dated September 9, 2002, from ASTIHL to August shall be deemed to have been served on August 28 days prior to Closing Date.

ARTICLE 11  REGISTRATION RIGHTS.

11.1)Required Registration.August shall file a Registration Statement under the Securities Act, in
accordance with the provisions of Form S-3, covering the resale of the shares of August Common Stock representing the Stock Portion (the "Registrable Stock") and will use
commercially reasonable efforts to have such Registration Statement become effective with the SEC as set forth in Section 11.2 below.

11.2)RegistrationGeneral Provisions.In connection with the registration of the Registrable Stock
under the Securities Act, August will:



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11.3)Registration Expense.August shall pay all Registration Expenses (as defined below) in connection with the
inclusion of Registrable Shares in any Registration Statement, or application to register or qualify such shares under state securities laws, filed by August hereunder, other than as set forth herein.
For purposes of this Agreement, the term "Registration Expenses" means the filing fees payable to the SEC, any state agency and the NASD; the fees and expenses of August's legal counsel and
independent certified public accountants in connection with the preparation and filing of the Registration Statement (and all amendments and supplements thereto) with the SEC; and all expenses
relating to the printing of the Registration Statement, prospectuses and various agreements executed in connection with the Registration Statement. ASTIHL will pay the fees and expenses of any legal
counsel ASTIHL may engage, as well as any custodian fees or discounts which may be payable to any underwriter.

11.4)Restrictions on Sales.All sales by ASTIHL of Registrable Shares pursuant to the Registration Statement
shall involve one of the three market makers in August Common Stock

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determined by August to have the highest trading volume immediately prior to the time of such sale, either as a purchaser in a transaction with such market maker as principal or as a broker in a
transaction with a third party as buyer. This limitation shall not apply to any private sales by ASTIHL pursuant to an exemption from the registration requirements pursuant to Rule 144 under
the Securities Act. August will use commercially reasonable efforts to assist ASTIHL in transacting such sales.

11.5)Suspensions on Sales.ASTIHL acknowledges that there may occasionally be times when August must suspend
the use of the prospectus forming a part of the Registration Statement, when there exists material non-public information relating to August (including, but not limited to, an acquisition,
merger, recapitalization, consolidation, reorganization or similar transaction (or negotiations with respect thereto)) which in the reasonable opinion of August's Board of Directors should not be
disclosed. Accordingly, August may suspend resales pursuant to such Registration Statement for a period not to exceed sixty (60) days in any twelve (12) month period if August has been
advised by counsel that the information the Board reasonably believes should not be disclosed is material and therefore the prospectus forming a part of the Registration Statement is not current.
ASTIHL agrees that it shall not sell any Registrable Shares pursuant to said prospectus during the period commencing at the time at which August gives ASTIHL notice of the suspension of such
prospectus and ending at the time August gives ASTIHL notice that ASTIHL may thereafter effect sales pursuant to such prospectus.

ARTICLE 12  ALTERNATIVE DISPUTE RESOLUTION

12.1)Arbitration.If the transactions contemplated by this agreement are not fully consummated by Closing Date
for any reason whatsoever, all parties shall immediately proceed to binding arbitration in accordance with Article 12 of the May 23 Agreement to resolve all claims, disputes,
controversies, and other matters in question arising out of or relating to this Agreement and the May 23 Agreement, including claims for Indemnifiable Losses and disputes regarding the making
of this Agreement or the May 23 Agreement or both, including claims of fraud in the inducement, or to the alleged breach of the May 23 Agreement or this Agreement or both. The parties
agree that in such an event, the ninety day period stipulated in Article 12.1 of the May 23 Agreement shall be deemed to be exhausted and that the Notice of demand for arbitration dated
September 9, 2002, from ASTIHL to August shall be deemed to have been served on August 28 days prior to Closing Date. If the transactions contemplated by this agreement are
consummated, commercially reasonable efforts shall be made by the parties to discuss, negotiate or otherwise resolve amongst themselves all claims, disputes, controversies, and other matters in
question arising out of or relating to this Agreement, including claims for Indemnifiable Losses and disputes regarding the making of this Agreement, including claims of fraud in the inducement, or to
the alleged breach hereof. If such resolution is not achieved within ninety (90) days of written notice by one party to the other of such matter, then all claims, disputes, controversies, and
other matters in question arising out of or relating to this Agreement, including claims for Indemnifiable Losses and disputes regarding the making of this Agreement, including claims of fraud in the
inducement, or to the alleged breach hereof, shall be settled by binding arbitration in accordance with procedures set forth in Section 12.2 and 12.3 below.

12.2)Notice.Notice of demand for binding arbitration shall be given in writing to the other parties pursuant
to Section 13.5. The arbitration shall be deemed commenced as to any respondent on the date on which notice of arbitration is received by the respondent or on the date of a return receipt. The
notice of arbitration shall include:



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Within
30 days of receipt of the notice of arbitration, the respondent shall deliver to the claimant a notice of defense. Failure to deliver a notice of defense shall not delay the arbitration,
but rather shall be deemed as a general denial by the respondent.

12.3)Binding Arbitration.Upon filing of a notice of demand for binding arbitration by any party hereto,
arbitration shall be commenced and conducted as follows:



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ARTICLE 13  OTHER PROVISIONS

13.1)ASTIHL Agreements.ASTIHL, by executing this Agreement, agrees and acknowledges this Agreement constitutes
such ASTIHL's consent to all approvals, waivers, amendments, and other actions

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required to be taken under all documents and agreements involving STI and ASTIHL in order to consummate the transactions contemplated by this Agreement.

13.2)Termination of Prior Agreement; Complete Agreement.Upon full consummation of the transactions
contemplated by this agreement, the May 23 Agreement shall be deemed to be terminated in all respects and thereafter shall have no further force or effect. Thereafter August releases and
forever discharges STI and ASTIHL, and STI and ASTIHL thereafter release and forever discharge August, of and from any and all manner of claims, demands, actions, causes of action, liability, damages,
claims for punitive or liquidated damages, claims for attorneys' fees, costs and disbursements, or demands of any kind whatsoever, which such parties have or might have against the other parties,
whether known or unknown, in law or equity, contract or tort, arising out of or in connection with the May 23 Agreement, the termination of the May 23 Agreement or otherwise, and however
originating or existing from the beginning of time through the Closing Date of this Agreement. This Agreement and the Schedules and Exhibits hereto, and all documents entered into pursuant thereto,
constitute the entire agreement between the parties hereto with respect to the settlement of the issues arising from the May 23 Agreement and supersede all prior agreements whether written or
oral relating hereto. The Schedules and Exhibits to this Agreement shall be construed as an integral part of this Agreement to the same extent as if they had been set forth verbatim herein.

13.3)Survival of Representations and Warranties.The representations and warranties contained in Articles 3 and
4 of this Agreement shall survive the Closing and remain in full force and effect until (i) with respect to matters not identified on Schedule 13.3, 2 years after the Closing Date, or
(ii) with respect to matters identified on Schedule 13.3, the expiration of all applicable statutes of limitation or such shorter period specified in suchSchedule 13.3(the "Survival Period"). Expiration of a representation and warranty pursuant to this Section shall not limit or otherwise affect
the right of a party to indemnification with respect thereto under Article 9 if notice was sent to the party from whom indemnification is sought of the basis for such claim to indemnification
prior to such expiration. No independent investigation of STI by August, its counsel, or any of its agents or employees shall in any way limit or restrict the scope of the representations and
warranties made by STI and ASTIHL in this Agreement or the agreements relating hereto.

13.4)Waiver, Discharge, Amendment, Etc.The failure of any party hereto to enforce at any time any of the
provisions of this Agreement, including the election of such party to proceed with the Closing despite a failure of any condition to such party's closing obligations to occur, shall in no way be
construed to be a waiver of any such provision, nor in any way to affect the validity of this Agreement or any part thereof or the right of the party thereafter to enforce each and every such
provision. No waiver of any breach of this Agreement shall be held to be a waiver of any other or subsequent breach. Any amendment to this Agreement shall be in writing and signed by STI and ASTIHL
and August.

13.5)Notices.All notices or other communications to a party required or permitted hereunder shall be in
writing and shall be delivered personally or by telecopy to such party (or, in the case of an entity, to an executive officer of such party) or shall be given by certified mail, postage prepaid with
return receipt requested (or a comparable international delivery), addressed as follows:

if
to August or, after the Closing to STI, to:



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and
if to ASTIHL, STIH or Flextech, or prior to the Closing, to STI, to:



Any
party may change the above-specified recipient and/or mailing address by notice to all other parties given in the manner herein prescribed. All notices shall be deemed given on the
day when actually delivered as provided above (if delivered personally or by telecopy) or on the day shown on the return receipt (if delivered by mail).

13.6)Public Announcement.The parties intend that all future statements or communications to the public or
press regarding this Agreement or the transactions contemplated hereby will be mutually agreed upon by them. No party shall, without such mutual agreement or the prior consent of the other, issue any
statement or communication to the public or to the press regarding this Agreement, or any of the terms, conditions or other matters with respect to this Agreement, except as required by law or the
rules of the Nasdaq Stock Market and/or Singapore Stock Exchange and then only: (a) upon the advice of such party's legal counsel; (b) to the extent required by law or the rules of the
Nasdaq Stock Market and/or Singapore Stock Exchange; and (c) following prior notice to, and consultation with, the other party (which notice shall include a copy of the proposed statement or
communication to be issued to the press or public).

13.7)Expenses.August shall pay its own expenses incident to this Agreement and the preparation for, and
consummation of, the transactions provided for herein. Except as provided in the following sentence, ASTIHL shall pay any and all expenses of STI and ASTIHL incident to this Agreement and the
preparation for, and consummation of, the transactions provided for herein. August shall pay 50% of the $100,000 lease termination consulting fee owed by STI to United Properties for services rendered
in connection with the termination of STI's lease as required pursuant to Section 5.14 and up to $15,000 of fees of legal counsel incurred in rendering the legal opinion or opinions required by
Section 6.2(b).

13.8)Governing Law.This Agreement shall be governed by and interpreted in accordance with the laws of
Delaware, including all matters of construction, validity, performance and enforcement, without giving effect to principles of conflict of laws.

13.9)Successors and Assigns.This Agreement shall be binding upon and inure to the benefit of the parties
hereto and the successors or assigns of the parties hereto; provided that the rights of STI and ASTIHL herein may not be assigned and the rights of August may be assigned only to an Affiliate of
August provided August guarantees the obligations of such assignee.

13.10)Titles and Headings; Construction.The Table of Contents, titles and headings to the Articles and
Sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. This Agreement shall be

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construed without regard to any presumption or other rule requiring construction hereof against the party causing this Agreement to be drafted.

13.11)Benefit.Nothing in this Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto or their respective successors or assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

13.12)Counterparts.This Agreement may be executed in any number of counterparts, each of which shall be deemed
as original and all of which together shall constitute one instrument.

IN
WITNESS WHEREOF, each of the parties has caused this Agreement to be executed in the manner appropriate for each, and to be dated as of the date first above written.

| |  | AUGUST TECHNOLOGY CORPORATION                 
| |  | ----------------------------------------------
| |  | By:                                           
| |  | Its:                                          
| |  | ASTI HOLDINGS LIMITED                         
| |  | By:                                           
| |  | Its:                                          
| |  | SEMICONDUCTOR TECHNOLOGIES & INSTRUMENTS, INC.
| |  | By:                                           
| |  | Its:                                          

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