Document:

THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE,
SOLD,  TRANSFERRED  OR  ASSIGNED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
STATEMENT FOR THE SECURITIES  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR
APPLICABLE  STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
SATISFACTORY  TO THE ISSUER THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE  STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.

                              AMTECH SYSTEMS, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: W8 Number of Shares:3,630
Date of Issuance: September 8, 2000

Amtech Systems,  Inc., an Arizona corporation (the "Company"),  hereby certifies
that, for good and valuable consideration,  the receipt and sufficiency of which
are hereby  acknowledged,  Bay Harbor  Investments,  Inc., the registered holder
hereof, or its permitted assigns (a "holder"), is entitled, subject to the terms
set forth below, to purchase from the Company upon surrender of this Warrant, at
any time or times on or after the date hereof,  but, as to any specific  Warrant
Shares (as defined below),  not after 11:59 P.M.  Eastern Time on the applicable
Expiration Date (as defined  herein),  up to 3,630 fully paid and  nonassessable
shares of Common Stock (as defined herein) of the Company (the "Warrant Shares")
at the purchase price per share provided below.

     1. DEFINITIONS.

     (a) DEFINED  TERMS.  The following  words and terms as used in this Warrant
shall have the following meanings:

          (i) "Business Day" means any day other than Saturday,  Sunday or other
     day on which  commercial  banks in the City of New York are  authorized  or
     required by law to remain closed.

          (ii) "Closing Bid Price" means,  for any security as of any date,  the
     last  closing  bid  price for such  security  on the  principal  securities
     exchange  or trading  market  where such  security is listed or traded (the
     "Principal   Market')   as   reported  by   Bloomberg   Financial   Markets
     ("Bloomberg"),  or if the  foregoing  does not apply,  the last closing bid
     price of such  security in the  over-the-counter  market on the  electronic
     bulletin  board for such  security  as  reported  by  Bloomberg,  or, if no
     closing bid price is reported  for such  security  by  Bloomberg,  the last

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     closing trade price for such  security as reported by Bloomberg,  or, if no
     last closing trade price is reported for such  security by  Bloomberg,  the
     average  of the bid  prices  of any  market  makers  for such  security  as
     reported in the "pink sheets" by the National Quotation Bureau, Inc. If the
     Closing Bid Price cannot be  calculated  for such  security on such date on
     any of the foregoing  bases, the Closing Bid Price of such security on such
     date shall be the fair market value as mutually  determined  by the Company
     and  the  holder  of  this  Warrant.  All  such  determinations  are  to be
     appropriately adjusted for any stock dividend, stock split or other similar
     transaction during such period.

          (iii) "Closing Sale Price" means, for any security as of any date, the
     last  closing  trade  price for such  security on the  Principal  Market as
     reported by Bloomberg, or if the foregoing does not apply, the last closing
     trade  price  of  such  security  in  the  over-the-counter  market  on the
     electronic  bulletin board for such security as reported by Bloomberg,  or,
     if no last closing  trade price is reported for such security by Bloomberg,
     the last closing ask price of such security as reported by  Bloomberg,  or,
     if no last  closing ask price is reported for such  security by  Bloomberg,
     the  average  of the  lowest  ask price and  lowest bid price of any market
     makers for such  security as reported in the "pink  sheets" by the National
     Quotation  Bureau,  Inc. If the Closing Sale Price cannot be calculated for
     such security on such date on any of the foregoing  bases, the Closing Sale
     Price of such  security  on such  date  shall be the fair  market  value as
     mutually  determined by the Company and the holder of this Warrant.  If the
     Company  and the holder of this  Warrant  are unable to agree upon the fair
     market value of the Common  Stock,  then such dispute  shall be resolved by
     the term  "Market  Price"  being  substituted  for the term  "Closing  Sale
     Price." All such  determinations  are to be appropriately  adjusted for any
     stock  dividend,  stock  split or other  similar  transaction  during  such
     period.

          (iv) "Common  Stock" means (i) the Company's  common stock,  par value
     $.01 per share,  and (ii) any capital  stock into which such  Common  Stock
     shall  have  been   changed  or  any  capital   stock   resulting   from  a
     reclassification  of such Common  Stock;  provided,  however,  that, at the
     Company's  option,  the Company may substitute for any Warrant Shares to be
     issued  hereunder  a class  or  series  of  capital  stock  which is in all
     respects the same as the Common Stock,  except that shares of such class or
     series may have no or limited voting rights, in which event the term Common
     Stock will include such class or series for all purposes hereunder.

          (v)  "Expiration  Date" means the fifth  anniversary  of the  Issuance
     Date; provided,  however,  that if any such Expiration Date would otherwise
     fall on a  Saturday,  Sunday or other day on which  banks are  required  or
     authorized to be closed in the City of New York or the State of New York or
     on which trading does not take place on the Principal Market (a "Holiday"),
     such Expiration Date shall be the next date that is not a Holiday.

          (vi) "Issuance  Date" means the date of issuance of this Warrant first
     referenced above.

          (vii) "Market Price" means,  with respect to any security for any date
     of  determination,  that price which  shall be  computed as the  arithmetic

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     average of the Closing Bid Prices for such security on each of the five (5)
     consecutive  trading days immediately  preceding such date of determination
     (all  such  determinations  to be  appropriately  adjusted  for  any  stock
     dividend, stock split or similar transaction during the pricing period).

          (viii) "Person" means an individual,  a limited liability  company,  a
     partnership,  a joint venture,  a corporation,  a trust, an  unincorporated
     organization and a government or any department or agency thereof.

          (ix) "Securities Act" means the Securities Act of 1933, as amended.

          (x) "Warrant"  means this Warrant and all warrants issued in exchange,
     transfer or replacement thereof.

          (xi) "Warrant Exercise Price" shall be $15.12.

     (b) OTHER DEFINITIONAL  PROVISIONS.  Except as otherwise  specified herein,
all  references  herein  (A) to the  Company  shall be  deemed  to  include  the
Company's  successors  and (B) to any  applicable  law  defined or  referred  to
herein,  shall be deemed  references to such applicable law as the same may have
been or may be  amended  or  supplemented  from time to time.  When used in this
Warrant,  the words "herein,"  "hereof," and  "hereunder,"  and words of similar
import,  shall refer to this Warrant as a whole and not to any provision of this
Warrant,  and the words  "Section,"  "Schedule,"  and  "Exhibit"  shall refer to
Sections  of, and  Schedules  and Exhibits  to, this  Warrant  unless  otherwise
specified.  Whenever the context so  requires,  the neuter  gender  includes the
masculine or feminine,  and the singular  number  includes the plural,  and vice
versa.

     2. EXERCISE OF WARRANT.

     (a)  Subject  to the terms  and  conditions  hereof,  this  Warrant  may be
exercised  as to any  Warrant  Shares  with  respect  to  which  the  applicable
Expiration Date has not passed by the holder hereof then registered on the books
of the Company, in whole or in part, at any time on any Business Day on or after
the opening of business on the date hereof and prior to 11:59 P.M.  Eastern Time
on the applicable  Expiration Date by (i) delivery of a written  notice,  in the
form of the  subscription  notice  attached as EXHIBIT A hereto  (the  "Exercise
Notice"), of such holder's election to exercise this Warrant, which notice shall
specify the number of Warrant  Shares to be  purchased;  (ii) (A) payment to the
Company of an amount  equal to the  Warrant  Exercise  Price  multiplied  by the
number of  Warrant  Shares as to which  this  Warrant  is being  exercised  (the
"Aggregate Exercise Price") in cash, certified or bank funds or wire transfer of
immediately  available  funds or (B)  notifying the Company that this Warrant is
being  exercised  pursuant to a Cashless  Exercise (as defined in Section 2(d));
and  (iii)  the  surrender  of this  Warrant  (or a Lost  Warrant  Affidavit  in
substantially  the form annexed hereto as EXHIBIT B with respect to this Warrant
in the case of its loss, theft or destruction) to the Company; provided, that if
such  Warrant  Shares  are to be  issued  in any  name  other  than  that of the
registered holder of this Warrant,  such issuance shall be deemed a transfer and
the provisions of Section 8 shall be applicable. In the event of any exercise of

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the rights represented by this Warrant in compliance with this Section 2(a), the
Company  shall not later than the seventh  Business  Day  following  the date of
receipt of the Exercise  Notice,  the Aggregate  Exercise  Price (or notice of a
Cashless   Exercise)   and  this  Warrant  (or  a  Lost  Warrant   Affidavit  in
substantially  the form annexed hereto as EXHIBIT B with respect to this Warrant
in the  case  of  its  loss,  theft  or  destruction)  (the  "Exercise  Delivery
Documents"),  deliver  to the  address  specified  in  the  Exercise  Notice,  a
certificate,  registered  in the name of the holder (or its  designee),  for the
number  of  Warrant  Shares  to which  the  holder  (or its  designee)  shall be
entitled.  Upon  delivery of the Exercise  Notice and Aggregate  Exercise  Price
referred to above or notification to the Company of a Cashless Exercise referred
to in Section 2(d), the holder of this Warrant (or its designee) shall be deemed
for all  corporate  purposes  to have become the holder of record of the Warrant
Shares with respect to which this Warrant has been  exercised,  irrespective  of
the date of delivery of the certificates evidencing such Warrant Shares.

     (b) Unless the rights  represented  by this  Warrant  shall have expired or
shall have been fully  exercised,  the Company shall, as soon as practicable and
in no event later than seven (7)  Business  Days after  delivery of the Exercise
Delivery Documents and at its own expense,  issue a new Warrant identical in all
respects to this Warrant  exercised except it shall represent rights to purchase
the number of Warrant  Shares  purchasable  immediately  prior to such  exercise
under this Warrant exercised,  less the number of Warrant Shares with respect to
which such Warrant is exercised.

     (c) No fractional shares of Common Stock are to be issued upon the exercise
of this  Warrant,  but rather the number of shares of Common  Stock  issued upon
exercise of this Warrant shall be rounded up to the nearest whole number.

     (d) The Holder of this Warrant may, in its sole  discretion,  exercise this
Warrant in whole or in part and,  in lieu of making the cash  payment  otherwise
contemplated  to be made to the  Company  upon such  exercise  in payment of the
Aggregate  Exercise Price,  elect instead to receive upon such exercise the "Net
Number" of shares of Common Stock determined  according to the following formula
(a "Cashless Exercise"):

          Net Number = (A X B) - (A X C)
                       -----------------
                               B

          For purposes of the foregoing formula:

               A  =  the  total  number of shares  with  respect  to which  this
                     Warrant is then being exercised.

               B  =  the  Market  Price as of  the date of  the Exercise Notice.

               C  =  the Warrant Exercise Price then in effect for the
                     applicable Warrant Shares at the time of such exercise.

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     3.  (a)   ADJUSTMENT   FOR   DIVIDENDS   IN  OTHER   STOCK  AND   PROPERTY;
RECLASSIFICATIONS.  In case at any time or from time to time the  holders of the
Common Stock (or any shares of stock or other  securities at the time receivable
upon the  exercise of this  Warrant)  shall have  received,  or, on or after the
record date fixed for the  determination  of eligible  shareholders,  shall have
become entitled to receive, without payment therefor,

               (1) other or  additional  stock or other  securities  or property
          (other than cash) by way of dividend,

               (2) any cash or other  property paid or payable out of any source
          other than retained earnings  (determined in accordance with generally
          accepted accounting principles), or

               (3) other or  additional  stock or other  securities  or property
          (including  cash) by way of stock-split,  spin-off,  reclassification,
          combination of shares or similar corporate rearrangement,

(other  than (x) shares of Common  Stock or any other stock or  securities  into
which such  Common  Stock shall have been  exchanged,  or (y) any other stock or
securities  convertible into or exchangeable for such Common Stock or such other
stock or  securities),  then and in each such case a holder,  upon the  exercise
hereof as  provided  in Section 2, shall be  entitled  to receive  the amount of
stock and other securities and property (including cash in the cases referred to
in clauses (2) and (3) above)  which such holder  would hold on the date of such
exercise  if on the  Issuance  Date such holder had been the holder of record of
the number of shares of Common Stock called for on the face of this Warrant, and
had  thereafter,  during the period from the Issuance  Date to and including the
date of such exercise, retained such shares and/or all other or additional stock
and other  securities and property  (including  cash in the cases referred to in
clause (2) and (3) above)  receivable  by it as  aforesaid  during such  period,
giving effect to all adjustments  called for during such period by Sections 3(a)
and 3(b).

     (b) ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION AND MERGER. In case of any
reorganization  of the  Company  (or any  other  corporation  the stock or other
securities of which are at the time  receivable on the exercise of this Warrant)
or  reclassification  of its securities  after the Issuance Date, or the Company
(or any such other  corporation)  shall  consolidate  with or merge into another
corporation or entity or convey or exchange all or substantially  all its assets
to another  corporation or entity, then and in each such case the holder of this
Warrant, upon the exercise hereof as provided in Section 2 at any time after the
consummation of such reorganization,  reclassification,  consolidation,  merger,
conveyance  or exchange,  shall be entitled to receive,  in lieu of the stock or
other securities and property receivable upon the exercise of this Warrant prior
to such  consummation,  the stock or other  securities or property to which such
holder  would  have been  entitled  upon such  consummation  if such  holder had
exercised  this  Warrant  immediately  prior  thereto,  all  subject  to further
adjustment  as provided in Sections  3(a),  (b), (c) and (d); in each such case,
the terms of this Warrant  shall be  applicable  to the shares of stock or other
securities or property  receivable  upon the exercise of this Warrant after such
consummation.

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     (c) ADJUSTMENT FOR CERTAIN DIVIDENDS AND  DISTRIBUTIONS.  If the Company at
any  time  or  from  time  to  time  makes,  or  fixes  a  record  date  for the
determination  of  holders  of  Common  Stock  (or any  shares of stock or other
securities at the time receivable upon the exercise of this Warrant) entitled to
receive,  a dividend or other  distribution  payable in additional shares of (x)
Common Stock or any other stock or securities into which such Common Stock shall
have been exchanged,  or (y) any other stock or securities  convertible  into or
exchangeable  for such Common Stock or such other stock or securities,  then and
in each such event

                    (1) the  Warrant  Exercise  Price  then in  effect  shall be
decreased  as of the time of the issuance of such  additional  shares or, in the
event such  record  date is fixed,  as of the close of  business  on such record
date, by multiplying the Warrant Exercise Price then in effect by a fraction (A)
the  numerator of which is the total number of shares of Common Stock issued and
outstanding  immediately  prior to the  time of such  issuance  or the  close of
business  on such record  date,  and (B) the  denominator  of which shall be the
total number of shares of Common Stock issued and outstanding  immediately prior
to the time of such issuance or the close of business on such record date as the
case may be,  plus the number of shares of Common  Stock  issuable in payment of
such dividend or distribution;  PROVIDED,  HOWEVER,  that if such record date is
fixed and such dividend is not fully paid or if such  distribution  is not fully
made on the date fixed therefor,  the Warrant Exercise Price shall be recomputed
accordingly  as of the close of business on such record date, and thereafter the
Warrant Exercise Price shall be adjusted pursuant to this Section 3(c) as of the
time of actual payment of such dividends or distributions; and

                    (2)  the  number  of  shares  of  Common  Stock  theretofore
receivable upon the exercise of this Warrant shall be increased,  as of the time
of such issuance or, in the event such record date is fixed,  as of the close of
business on such  record  date,  in inverse  proportion  to the  decrease in the
Warrant Exercise Price.

     (d) STOCK SPLIT AND REVERSE STOCK SPLIT. If the Company at any time or from
time to time  effects a stock split or  subdivision  of the  outstanding  Common
Stock, the Warrant Exercise Price then in effect  immediately  before that stock
split or subdivision shall be proportionately decreased and the number of shares
of Common Stock  theretofore  receivable upon the exercise of this Warrant shall
be  proportionately  increased.  If the Company at any time or from time to time
effects a reverse stock split or combines the outstanding shares of Common Stock
into a smaller  number of  shares,  the  Warrant  Exercise  Price then in effect
immediately   before  that  reverse   stock  split  or   combination   shall  be
proportionately  increased and the number of shares of Common Stock  theretofore
receivable upon the exercise of this Warrant shall be proportionately decreased.
Each adjustment  under this Section 3(d) shall become  effective at the close of
business  on the date the  stock  split,  subdivision,  reverse  stock  split or
combination becomes effective.

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     4. COVENANTS AS TO COMMON STOCK. The Company hereby covenants and agrees as
follows:

     (a) This  Warrant  is,  and any  Warrants  issued  in  substitution  for or
replacement  of this Warrant will upon issuance be, duly  authorized and validly
issued.

     (b) All Warrant  Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance,  be validly issued,  fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof.

     (c) During the period within which the rights  represented  by this Warrant
may be exercised,  the Company will at all times have authorized and reserved at
least 100% of the  number of shares of Common  Stock  needed to provide  for the
exercise of the rights  then  represented  by this  Warrant and the par value of
said  shares will at all times be less than or equal to the  applicable  Warrant
Exercise Price.

     (d) The  Company  shall  secure the  listing of the shares of Common  Stock
issuable upon exercise of this Warrant upon each national securities exchange or
automated  quotation  system, if any, upon which shares of Common Stock are then
listed within the time required by such exchange or quotation system's rules and
regulations  and shall  maintain,  so long as any other  shares of Common  Stock
shall be so listed, such listing of all shares of Common Stock from time to time
issuable  upon the exercise of this  Warrant;  and the Company  shall so list on
each national  securities exchange or automated quotation system within the time
required by such exchange or quotation  system's rules and  regulations,  as the
case may be, and shall  maintain  such  listing of, any other  shares of capital
stock of the Company  issuable  upon the exercise of this Warrant if and so long
as any  shares of the same  class  shall be listed on such  national  securities
exchange or automated quotation system.

     (e) The Company will not, by amendment of its Certificate of  Incorporation
or  through  any  reorganization,  transfer  of assets,  consolidation,  merger,
dissolution,  issue or sale of securities,  or any other voluntary action, avoid
or seek to  avoid  the  observance  or  performance  of any of the  terms  to be
observed  or  performed  by it  hereunder,  but will at all times in good  faith
assist in the  carrying  out of all the  provisions  of this  Warrant and in the
taking of all such action as may  reasonably  be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other  impairment,  consistent with the tenor and purpose of
this Warrant.  Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common  Stock  receivable  upon
the exercise of this Warrant  above the Warrant  Exercise  Price then in effect,
and (ii) will take all such actions as may be necessary or  appropriate in order
that the Company may  validly  and  legally  issue fully paid and  nonassessable
shares of Common Stock upon the exercise of this Warrant.

     (f) This Warrant will be binding upon any entity  succeeding to the Company
by merger,  consolidation  or  acquisition  of all or  substantially  all of the
Company's   assets  and  any  such   successive   mergers,   consolidations   or
acquisitions.

     5. TAXES. The Company shall pay any and all taxes which may be payable with
respect to the  issuance and  delivery of Warrant  Shares upon  exercise of this
Warrant;  provided,  however,  that the Company shall not be required to pay any

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tax that may be  payable in respect  of any  transfer  involved  in the issue or
delivery of Common  Stock or other  securities  or property in a name other than
that of the  registered  holders of this Warrant to be converted and such holder
shall pay such amount, if any, to cover any applicable transfer or similar tax.

     6.  WARRANT   HOLDER  NOT  DEEMED  A   STOCKHOLDER.   Except  as  otherwise
specifically  provided  herein,  no holder of this Warrant,  solely by virtue of
such  holding,  shall be entitled to vote or receive  dividends or be deemed the
holder of shares of the Company for any purpose, nor shall anything contained in
this Warrant be construed to confer upon the holder hereof,  as such, any of the
rights of a  stockholder  of the Company or any right to vote,  give or withhold
consent  to any  corporate  action  (whether a  reorganization,  issue of stock,
reclassification  of stock,  consolidation,  merger,  conveyance or  otherwise),
receive  notice of  meetings,  receive  dividends  or  subscription  rights,  or
otherwise,  prior to the  issuance to the holder of this  Warrant of the Warrant
Shares which he or she is then entitled to receive upon the due exercise of this
Warrant.  In addition,  nothing  contained in this Warrant shall be construed as
imposing  any  liabilities  on such  holder to  purchase  any  securities  (upon
exercise of this  Warrant or  otherwise)  or as a  stockholder  of the  Company,
whether  such  liabilities  are  asserted by the Company or by  creditors of the
Company.  Notwithstanding this Section 6, the Company will provide the holder of
this Warrant with copies of the same notices and other  information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

     7. REPRESENTATIONS OF HOLDER. The holder of this Warrant, by the acceptance
hereof,  represents that it is acquiring this Warrant and the Warrant Shares for
its own account for investment  only and not with a view towards,  or for resale
in  connection  with,  the public sale or  distribution  of this  Warrant or the
Warrant  Shares,  except  pursuant to sales  registered  or  exempted  under the
Securities Act; provided,  however,  that by making the representations  herein,
the holder does not agree to hold this Warrant or any of the Warrant  Shares for
any minimum or other  specific  term and  reserves  the right to dispose of this
Warrant and the Warrant  Shares at any time in accordance  with or pursuant to a
registration  statement or an exemption  under the Securities Act. The holder of
this Warrant further  represents,  by acceptance hereof,  that, as of this date,
such  holder  is an  "accredited  investor"  as  such  term is  defined  in Rule
501(a)(1) of Regulation D promulgated by the Securities and Exchange  Commission
under the Securities Act (an "Accredited Investor").

     8. OWNERSHIP AND TRANSFER.

     (a) The Company shall maintain at its principal  executive offices (or such
other  office or  agency of the  Company  as it may  designate  by notice to the
holder hereof),  a register for this Warrant,  in which the Company shall record
the name and address of the person in whose name this  Warrant has been  issued,
as well as the name and  address of each  transferee.  The Company may treat the
person in whose name any Warrant is  registered on the register as the owner and
holder  thereof for all purposes,  but in all events  recognizing  any transfers
made in accordance with the terms of this Warrant.

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     (b) Subject to compliance with applicable securities laws, this Warrant and
the rights  granted  hereunder  shall be assignable by the holder hereof without
the consent of the Company.

     9. LOST, STOLEN,  MUTILATED OR DESTROYED WARRANT.  If this Warrant is lost,
stolen,  mutilated or destroyed,  the Company  shall,  on receipt of an executed
Lost Warrant  Affidavit in  substantially  the form annexed  hereto as EXHIBIT B
(or, in the case of a mutilated  Warrant,  the Warrant),  issue a new Warrant of
like  denomination  and tenor as this  Warrant  so lost,  stolen,  mutilated  or
destroyed.

     10. NOTICE. Any notices, consents, waivers or other communications required
or  permitted to be given under the terms of this Warrant must be in writing and
will be  deemed  to have  been  delivered:  (i)  upon  receipt,  when  delivered
personally;  (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending  party);  or (iii) one  Business  Day after  deposit  with a  nationally
recognized  overnight  delivery service,  in each case properly addressed to the
party to  receive  the  same.  The  addresses  and  facsimile  numbers  for such
communications shall be:

                  If to the Company:

                  Amtech Systems, Inc.
                  131 South Clark Drive
                  Tempe, Arizona  85281
                  Telephone: (480) 967-5146
                  Facsimile: (480) 968-3763
                  E-Mail: rthass@amtechsystems.com
                  Attn: Robert T. Hass
                        Vice President and Chief Financial Officer

                  With a copy to:

                  Squire, Sanders & Dempsey L.L.P.
                  Two Renaissance Square
                  40 North Central Avenue, Suite 2700
                  Phoenix, Arizona 85004
                  Telephone: (602) 528-4000
                  Facsimile: (602) 253-8129
                  Attention: Gregory R. Hall, Esq.

If to a holder of this Warrant,  to it at the address and  facsimile  number set
forth on the Company's register, or at such other address and facsimile as shall
be delivered to the Company by the holder at any time.  Each party shall provide
five days' prior  written  notice to the other party of any change in address or
facsimile number.  Written confirmation of receipt (A) given by the recipient of
such  notice,  consent,  waiver  or other  communication,  (B)  mechanically  or
electronically  generated by the sender's facsimile machine containing the time,
date,  recipient  facsimile  number  and an  image  of the  first  page  of such
transmission  or (C)  provided by a  nationally  recognized  overnight  delivery

                                       9
<PAGE>
service shall be rebuttable  evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

     11.  AMENDMENT  AND  WAIVER.  Except  as  otherwise  provided  herein,  the
provisions  of this  Warrant  may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it,  only if the  Company has  obtained  the  written  consent of the holders of
Warrants representing 51% of the shares of Common Stock obtainable upon exercise
of the Warrants then outstanding.

     12. DESCRIPTIVE  HEADINGS;  GOVERNING LAW. The descriptive  headings of the
several  Sections and  paragraphs  of this Warrant are inserted for  convenience
only and do not  constitute a part of this Warrant.  The  corporate  laws of the
State of Arizona shall govern all issues  concerning the relative  rights of the
Company and its stockholders.  All other questions  concerning the construction,
validity,  enforcement and  interpretation  of this Warrant shall be governed by
the internal laws of the State of Arizona,  without  giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Arizona, or
any other  jurisdictions)  that would cause the  application  of the laws of any
jurisdictions other than the State of Arizona.

                                         AMTECH SYSTEMS, INC.

                                         By:
                                             -----------------------------------
                                             Name: Robert T. Hass
                                             Title: Vice President & Chief
                                                    Financial Officer

                                       10
<PAGE>
                              EXHIBIT A TO WARRANT

                                SUBSCRIPTION FORM
        TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT
                              AMTECH SYSTEMS, INC.

     The   undersigned   holder   hereby   exercises   the  right  to   purchase
_________________  of the shares of Common  Stock  ("Warrant  Shares") of Amtech
Systems, Inc., an Arizona corporation (the "Company"), evidenced by the attached
Warrant (the "Warrant"). Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Warrant.

     1. Form of Warrant  Exercise Price.  The Holder intends that payment of the
Warrant Exercise Price shall be made as:

     ____________    a "CASH EXERCISE" with respect to _________________
                     Warrant Shares; and/or

     ____________    a "CASHLESS  EXERCISE" with respect to _______________
                     Warrant Shares (to the extent permitted by the terms of the
                     Warrant).

     2.  Payment of  Warrant  Exercise  Price.  In the event that the holder has
elected a Cash Exercise with respect to some or all of the Warrant  Shares to be
issued pursuant hereto, the holder shall pay the sum of  $___________________ to
the Company in accordance with the terms of the Warrant.

     3.  Delivery of Warrant  Shares.  The Company  shall  deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

Date: _______________________ __, ______

----------------------------------------
       Name of Registered Holder

By:
     -----------------------------------
     Name:
     Title:

                                      A-1
<PAGE>
                              EXHIBIT B TO WARRANT

                            FORM OF AFFIDAVIT OF LOSS

STATE OF                   )
                           ) ss:
COUNTY OF                  )

     The undersigned  (hereinafter  "Deponent"),  being duly sworn,  deposes and
says that:

     1. Deponent is an adult whose mailing address is:

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

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

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

     2.  Deponent is the  recipient  of a Warrant  (the  "Warrant")  from Amtech
Systems, Inc. (the "Company"),  dated ______________________ for the purchase of
_____________________  shares of Common Stock,  par value $.01 per share, of the
Company, at an exercise price of $_________________________ per share.

     3. The Warrant has been lost,  stolen,  destroyed or  misplaced,  under the
following circumstances:

     4. The Warrant was not endorsed.

     5. Deponent has made a diligent search for the Warrant, and has been unable
to find or recover same, and Deponent was the unconditional owner of the Warrant
at the time of loss,  and is  entitled  to the  full  and  exclusive  possession
thereof;  that neither the Warrant nor the rights of Deponent  therein  have, in
whole or in part, been assigned, transferred, hypothecated, pledged or otherwise
disposed of, in any manner whatsoever,  and that no person,  firm or corporation
other than the Deponent has any right,  title, claim, equity or interest in, to,
or respecting the Warrant.

     6. Deponent makes this Affidavit for the purpose of requesting and inducing
the  Company  and its  agents to issue a new  warrant  in  substitution  for the
Warrant.

                                      B-1
<PAGE>
     7. If the Warrant should ever come into the hands,  custody or power of the
Deponent or the Deponent's representatives, agents or assigns, the Deponent will
immediately and without consideration  surrender the Warrant to the Company, its
representatives,  agents or assigns,  its transfer agents or subscription agents
for cancellation.

     8. The Deponent hereby  indemnifies and holds harmless the Company from any
claim or demand for payment or  reimbursement of any party arising in connection
with the subject matter of this Affidavit.

Signed, sealed and dated:  _________________________

                                           -------------------------------------
                                           Deponent

Sworn to and subscribed before me this
____ day of _____________, _________

---------------------------------------
Notary Public

                                      B-2STOCK AND WARRANT PURCHASE AGREEMENT

     STOCK AND WARRANT PURCHASE AGREEMENT  ("Agreement"),  dated as of September
8,  2000,  by and among  Amtech  Systems,  Inc.,  an  Arizona  corporation  (the
"Company"),  and each person or entity who executes a counterpart signature page
to this  Agreement  and is listed as an  investor on SCHEDULE I attached to this
Agreement (each individually an "Investor" and collectively the "Investors").

                                  WITNESSETH:

     WHEREAS,  the Company desires to sell and issue to the Investors  listed on
SCHEDULE I, and the  Investors  listed on SCHEDULE I desire to purchase from the
Company,  up to an aggregate of 383,000  shares of Common Stock,  $.01 par value
per share (the "Common  Stock"),  of the Company on the terms and conditions set
forth herein;

     WHEREAS,  each  Investor  listed on SCHEDULE I will also  receive five year
warrants  (the  "Warrants"),  in the  identical  form and substance of EXHIBIT A
attached  hereto,  to purchase that number of additional  shares of Common Stock
equal to the product of ten percent (10%)  multiplied by the number of shares of
Common Stock  purchased by such Investor at a per share  exercise price equal to
the product of 110%  multiplied by the Common Stock  Purchase  Price (as defined
below);

     WHEREAS,  the Company has granted the  Investors  registration  rights with
respect  to the shares of Common  Stock  purchased  hereunder  and the shares of
Common Stock  issuable  upon  exercise of the Warrants  (the  "Warrant  Shares")
pursuant to the terms hereof; and

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

     CERTAIN DEFINITIONS.  As used in this Agreement,  the following terms shall
have the following respective meanings:

     "Closing" and "Closing Date" shall have the meanings ascribed to such terms
in Section 1.3 herein.

     "Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Holder"   and   "Holders"   shall   include  an  Investor  or   Investors,
respectively,  and any transferee of the shares of Common Stock, the Warrants or
the Warrant  Shares or  Registrable  Securities  which have not been sold to the
public to whom the  registration  rights  conferred by this  Agreement have been
transferred in compliance with this Agreement.

     "Registrable Securities" shall mean: (i) the shares of Common Stock and the
Warrant  Shares  issued or issuable to each Holder or the  respective  permitted
<PAGE>
transferee or designee; (ii) any securities issued to each Holder as a result of
any stock split, stock dividend,  recapitalization  or similar event or upon the
exchange of the shares of Common Stock,  the Warrants or the Warrant Shares;  or
(iii)  any  other  security  of  the  Company  issued  as a  dividend  or  other
distribution  with respect to, in exchange of or in  replacement  of Registrable
Securities.

     The terms  "register",  "registered"  and  "registration"  shall refer to a
registration  effected  by  preparing  and filing a  registration  statement  in
compliance  with  the  Securities  Act  and  applicable  rules  and  regulations
thereunder,  including without limitation,  Rule 415 under the Securities Act or
any successor rule providing for offering  securities on a continuous or delayed
basis, and the declaration or ordering of the effectiveness of such registration
statement by the Commission.

     "Registration  Expenses"  shall mean all  expenses  to be  incurred  by the
Company  in  connection  with  each  Holder's  registration  rights  under  this
Agreement,  including,  without  limitation,  all  registration and filing fees,
printing expenses,  fees and disbursements of counsel for the Company,  blue sky
fees and  expenses,  reasonable  fees and  disbursements  of counsel for Holders
(using a single  counsel  selected by a majority in the interest of the Holders)
for a "due diligence"  examination of the Company and review of the Registration
Statement and related documents,  and the expense of any special audits incident
to or required by any such  registration  (but  excluding  the  compensation  of
regular  employees  of the  Company,  which  shall  be paid in any  event by the
Company).

     "Registration Statement" shall have the meaning set forth in Section 4.1(a)
herein.

     "Regulation  D" shall mean  Regulation  D as  promulgated  pursuant  to the
Securities Act, and as subsequently amended.

     "Securities"  shall mean the shares of Common  Stock,  the Warrants and the
Warrant Shares, collectively.

     "Securities  Act" or "Act"  shall  mean  the  Securities  Act of  1933,  as
amended.

     "Selling  Expenses"  shall  mean all  underwriting  discounts  and  selling
commissions  applicable to the sale of Registrable  Securities,  if any, and all
fees and disbursements of counsel for Holders not included within  "Registration
Expenses".

                                    ARTICLE I

                   PURCHASE AND SALE OF THE STOCK AND WARRANTS

     Section 1.1 PURCHASE AND SALE. Upon the following terms and conditions, the
Company  shall issue and sell to each  Investor  listed on SCHEDULE I severally,
and each  Investor  listed on  SCHEDULE  I  severally  shall  purchase  from the
Company,  the  number  of shares of  Common  Stock  and the  number of  Warrants
indicated next to such Investor's name on SCHEDULE I attached hereto.

     Section 1.2 PURCHASE PRICE.  The per share purchase price for the shares of
Common  Stock  shall be equal to $13.75 per share of Common  Stock (the  "Common

                                       2
<PAGE>
Stock  Purchase  Price").  Each Investor  listed on SCHEDULE I will also receive
Warrants to purchase  such number of shares of Common Stock equal to the product
of 10%  multiplied  by the number of shares of Common  Stock  purchased at a per
share exercise price equal to 110% of the Common Stock Purchase Price.

     Section 1.3 THE  CLOSING.  (a) The closing of the  purchase and sale of the
Common Stock and Warrants  (the  "Closing"),  shall take place at the offices of
Squire,  Sanders & Dempsey L.L.P, at 10:00 a.m., local time following acceptance
by the Company of  subscriptions  representing an aggregate of  $5,266,250.00 of
shares of Common Stock,  which  acceptance  shall not occur until the conditions
set  forth in  Article V hereof  shall be  fulfilled  or  waived  in  accordance
herewith.  The date on which the  Closing  occurs is  referred  to herein as the
"Closing Date."

          (b) On the Closing  Date,  the Company  shall deliver to each Investor
certificates   (with  the  number  of  and  denomination  of  such  certificates
reasonably  requested by such Investor)  representing the Common Stock purchased
hereunder  by such  Investor  registered  in the  name of such  Investor  or its
nominee or deposit such Common Stock into accounts  designated by such Investor,
and such Investor shall deliver to the Company the purchase price for the Common
Stock  purchased  by such  Investor  hereunder by wire  transfer in  immediately
available funds to an account designated in writing by the Company. In addition,
each party shall deliver all documents,  instruments and writings required to be
delivered  by such party  pursuant to this  Agreement at or prior to the Closing
Date.  The  foregoing  notwithstanding,  the Company may, in lieu of  delivering
certificates  on the Closing Date,  deliver an  irrevocable  instruction  letter
addressed to the Company's  transfer  agent  authorizing  such transfer agent to
issue the applicable share certificates (the "Irrevocable Instruction Letter").

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

     Section 2.1  REPRESENTATIONS  AND  WARRANTIES  OF THE COMPANY.  The Company
hereby  makes  the  following  representations  and  warranties  to  each of the
Investors from and as of the date hereof through the Closing Date:

          (a)  ORGANIZATION  AND  QUALIFICATION;  MATERIAL  ADVERSE EFFECT.  The
Company owns 100% of the outstanding  capital stock of each of Tempress Systems,
Inc., a Texas corporation,  and P.R. Hoffman Machine Products,  Inc., an Arizona
corporation  (collectively,  the "Subsidiaries").  The Company does not have any
other direct or indirect subsidiaries.  Each of the Company and its Subsidiaries
is a corporation  duly  incorporated  and validly  existing and in good standing
under the laws of its respective  jurisdiction of incorporation  and the Company
and  the  Subsidiaries  each  have  the  requisite  corporate  power  to own its
properties  and to carry on its  business  as now being  conducted.  Each of the
Company and each  Subsidiary is duly  qualified as a foreign  corporation  to do
business and is in good  standing in every  jurisdiction  in which the nature of
the  business  conducted  or  property  owned  by it  makes  such  qualification
necessary  other than those in which the failure so to qualify  would not have a
Material Adverse Effect.  "Material  Adverse Effect" means any adverse effect on
the business, operations,  properties, or financial condition of the entity with
respect  to which  such term is used and which is  material  to such  entity and

                                       3
<PAGE>
other entities  controlling or controlled by such entity,  taken as a whole, and
any material adverse effect on the transactions contemplated under the Agreement
or any other agreement or document contemplated hereby.

          (b)  AUTHORIZATION;  ENFORCEMENT.  (i) The Company  has the  requisite
corporate  power and  authority to enter into and perform this  Agreement and to
issue the Securities in accordance with the terms hereof, (ii) the execution and
delivery of this  Agreement  by the Company  and the  consummation  by it of the
transactions  contemplated hereby, including the issuance of the Common Stock in
accordance  with the terms of this  Agreement  have been duly  authorized by all
necessary  corporate  action,  and no further  consent or  authorization  of the
Company  or its Board of  Directors  or  stockholders  is  required,  (iii) this
Agreement  has been duly  executed and  delivered by the Company,  and (iv) this
Agreement   constitutes  the  valid  and  binding  obligations  of  the  Company
enforceable  against  the  Company  in  accordance  with its  terms,  subject to
applicable bankruptcy, insolvency,  reorganization,  moratorium, liquidation and
other similar laws  affecting the  enforcement of creditors'  rights  generally,
general equitable  principles and the discretion of courts in granting equitable
remedies.

          (c)  CAPITALIZATION.  The  authorized  capital  stock  of the  Company
consists  of  100,000,000  shares of  Common  Stock  and  100,000,000  shares of
preferred stock, par value $.01 per share  ("Preferred  Stock");  without giving
effect to this  offering,  there  are  2,186,558  shares of Common  Stock and no
shares of  Preferred  Stock  issued and  outstanding,  respectively.  All of the
outstanding  shares of the Common Stock have been  validly  issued and are fully
paid and  non-assessable.  No  shares  of Common  Stock or  preferred  stock are
entitled to preemptive  rights;  without giving effect to this offering,  75,000
shares of Common Stock  (including  any shares of Common Stock issuable upon the
exercise of any outstanding options,  warrants or rights or upon the exchange or
conversion  of any  exchangeable  or  convertible  securities of the Company and
excluding an indeterminate  number of shares potentially issuable pursuant to an
earn-out  right granted in connection  with the  Company's  acquisition  of P.R.
Hoffman Machine Products Corporation) are entitled to registration rights (which
registration  rights do not adversely impact the registration  rights granted to
the  Investors);   and  without  giving  effect  to  this  offering,  there  are
outstanding options for 154,267 shares of Common Stock and outstanding  warrants
for 75,000  shares of Common  Stock.  Except for  warrants  issuable  to Wharton
Capital  Partners,  Ltd. and the Investors in connection  with this offering and
except as disclosed in the prior sentence and as  contemplated by this Agreement
or disclosed in the SEC Documents (as defined below),  there are no other scrip,
rights to  subscribe  for,  calls or  commitments  of any  character  whatsoever
relating to, or securities  or rights  exchangeable  or  convertible  into,  any
shares  of  capital   stock  of  the   Company,   or   contracts,   commitments,
understandings  or  arrangements  by which the Company is or may become bound to
issue  additional  shares of capital stock of the Company or options,  warrants,
scrip,  rights to  subscribe  for, or  commitments  to purchase or acquire,  any
shares, or securities or rights convertible into shares, of capital stock of the
Company.

          (d) NO CONFLICTS.  The  execution,  delivery and  performance  of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) result in a violation of the charter
or By-Laws of the Company or any Subsidiary or (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,

                                       4
<PAGE>
acceleration  or  cancellation  of, any  agreement,  indenture,  patent,  patent
license or  instrument  to which the Company or any  Subsidiary  is a party,  or
result in a  violation  of any  Federal,  state,  local or  foreign  law,  rule,
regulation,  order,  judgment or decree (including  Federal and state securities
laws and  regulations)  applicable to the Company or any  Subsidiary or by which
any  property  or asset of the  Company or any  Subsidiary  is bound or affected
(except for such conflicts, defaults, terminations,  amendments,  accelerations,
cancellations  and  violations as would not,  individually  or in the aggregate,
have  a  Material  Adverse   Effect);   provided  that,  for  purposes  of  such
representation as to Federal,  state,  local or foreign law, rule or regulation,
no  representation  is made  herein with  respect to any of the same  applicable
solely to the  Investors and not to the Company or any  Subsidiary.  Neither the
business of the Company nor of any Subsidiary is being conducted in violation of
any  law,  ordinance  or  regulation  of any  governmental  entity,  except  for
violations  which either  singly or in the  aggregate do not and will not have a
Material Adverse Effect. The Company is not required under Federal, state, local
or foreign law, rule or regulation to obtain any consent, authorization or order
of, or to make any filing or registration with, any court or governmental agency
in order for it to execute, deliver or perform any of its obligations under this
Agreement  or the Warrants or issue and sell the Common Stock or the Warrants in
accordance  with the terms hereof or issue the Warrant  Shares upon  exercise of
the  Warrants,  except for the  registration  provisions  provided  for  herein,
provided that,  for purposes of the  representation  made in this sentence,  the
Company  is  assuming   and   relying   upon  the   accuracy  of  the   relevant
representations and agreements of the Investors herein.

          (e) SEC  DOCUMENTS;  FINANCIAL  STATEMENTS.  The  Common  Stock of the
Company is  registered  pursuant to Section  12(g) of the  Exchange  Act and the
Company has timely filed all reports,  schedules,  forms,  statements  and other
documents  required  to be  filed  by it with  the  Commission  pursuant  to the
reporting requirements of the Exchange Act, including material filed pursuant to
Section 13(a) or 15(d), in addition to one or more  registration  statements and
amendments  thereto  heretofore filed by the Company with the Commission (all of
the foregoing including filings incorporated by reference therein being referred
to herein as the "SEC  Documents").  The Company has delivered or made available
to the  Investors  true and  complete  copies of all SEC  Documents  (including,
without   limitation,   proxy   information  and   solicitation   materials  and
registration  statements) filed with the Commission since September 30, 1999. As
of their respective dates, the SEC Documents (as amended by any amendments filed
prior to the date of this  Agreement  or any Closing  Date and  provided to each
Investor) complied or will comply in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Commission  promulgated
thereunder  and  other  Federal,  state and local  laws,  rules and  regulations
applicable to such SEC  Documents,  and none of the SEC  Documents  contained or
will  contain  any untrue  statement  of a  material  fact or omitted to state a
material  fact  required to be stated  therein or necessary in order to make the
statements  therein,  in light of the circumstances  under which they were made,
not  misleading.  The financial  statements  of the Company  included in the SEC
Documents comply as to form in all material respects with applicable  accounting
requirements  and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial statements
have been prepared in accordance with generally accepted  accounting  principles
applied on a consistent  basis during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of  unaudited  interim  statements,  to the extent they may not include
footnotes or may be condensed or summary  statements)  and fairly present in all

                                       5
<PAGE>
material respects the financial  position of the Company as of the dates thereof
and the  results  of  operations  and cash  flows  for the  periods  then  ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments and the lack of footnotes).

          (f)  PRINCIPAL  EXCHANGE/MARKET.  The  principal  market  on which the
Common Stock is currently traded is the Nasdaq SmallCap Market ("Nasdaq").

          (g) NO MATERIAL ADVERSE CHANGE.  Since June 30, 2000, the date through
which the most  recent  quarterly  report of the  Company  on Form 10-Q has been
prepared and filed with the  Commission,  a copy of which is included in the SEC
Documents, no event which had or is likely to have a Material Adverse Effect has
occurred or exists  with  respect to the  Company or any  Subsidiary,  except as
otherwise  disclosed  or  reflected  in press  releases  or other SEC  Documents
prepared through or as of a date subsequent to June 30, 2000 and provided to the
Investors.

          (h) NO UNDISCLOSED LIABILITIES. Neither the Company nor any Subsidiary
has any  liabilities  or obligations  not disclosed in the SEC Documents,  other
than  those  liabilities  incurred  in the  ordinary  course  of its  respective
business since June 30, 2000 or liabilities or  obligations,  individually or in
the aggregate,  which do not or would not have a Material  Adverse Effect on the
Company or the Subsidiaries, taken as a whole.

          (i) NO UNDISCLOSED  EVENTS OR CIRCUMSTANCES.  No event or circumstance
has  occurred or exists with  respect to the Company,  any  Subsidiary  or their
respective business, properties, operations or financial condition, which, under
applicable law, rule or regulation,  requires public  disclosure or announcement
by the Company but which has not been so publicly announced or disclosed.

          (j) NO GENERAL SOLICITATION. None of the Company, the Subsidiaries or,
to the Company's  knowledge,  any of their  respective  affiliates or any person
acting on its or their behalf has engaged in any form of general solicitation or
general  advertising (within the meaning of Regulation D) in connection with the
offer or sale of the Securities.

          (k) NO INTEGRATED OFFERING. None of the Company, the Subsidiaries, or,
to the Company's knowledge,  any of their respective  affiliates,  or any person
acting on its or their behalf has,  directly or  indirectly,  made any offers or
sales of any  security  or  solicited  any  offers  to buy any  security,  under
circumstances that would require registration of any of the Securities.

          (l)  INTELLECTUAL  PROPERTY.  Each of the Company and the Subsidiaries
owns or has licenses to use certain  copyrights  and  trademarks  ("intellectual
property") associated with its respective business.  Each of the Company and the
Subsidiaries  has all  intellectual  property rights which are needed to conduct
its  respective  business  as it is now being  conducted  or as  proposed  to be
conducted  as  disclosed  in the SEC  Documents.  The  Company  has no reason to
believe that the intellectual property rights owned by the Company or any of its
Subsidiaries are invalid or  unenforceable or that the use of such  intellectual
property by the Company or the Subsidiaries infringes upon or conflicts with any
right of any third  party,  and  neither  the  Company  nor any  Subsidiary  has
received  notice  of any such  infringement  or  conflict.  The  Company  has no

                                       6
<PAGE>
knowledge of any infringement of the Company's or any Subsidiary's  intellectual
property by any third party.

          (m) NO LITIGATION.  Except as set forth in the SEC Documents delivered
to the Investors or in Schedule  2.1(m)  hereto,  no litigation or claim against
the  Company  or any  Subsidiary  is  pending  or, to the  Company's  knowledge,
threatened, and no other event has occurred, which if determined adversely would
have a Material  Adverse  Effect on the  Company or any  Subsidiary,  taken as a
whole,  or would  materially  adversely  effect  the  transactions  contemplated
hereby.

          (n) BROKERS.  The Company has taken no action which would give rise to
any claim by any  person,  other than  Ferris,  Baker  Watts,  Incorporated  and
Wharton  Capital  Partners,  Ltd., for brokerage  commissions,  finder's fees or
similar  payments by the Company  relating to this Agreement or the transactions
contemplated  hereby.  The Company has taken no action  which would give rise to
any claim by any  person for  brokerage  commissions,  finder's  fees or similar
payments  by any  Investor  relating  to  this  Agreement  or  the  transactions
contemplated hereby.

          (o)  FORMS  S-3.  The  Company  is  eligible  to  file a  Registration
Statement on Form S-3 under the Act and the rules  promulgated  thereunder,  and
Form S-3 is permitted to be used for the transactions  contemplated hereby under
the Act and the rules promulgated thereunder.

     Section 2.2  REPRESENTATIONS  AND WARRANTIES OF THE INVESTORS.  Each of the
Investors, severally and not jointly, hereby makes the following representations
and warranties to the Company as of the date hereof and on the Closing Date:

          (a)  AUTHORIZATION;  ENFORCEMENT.  (i) Such Investor has the requisite
power and authority,  or the legal  capacity,  as the case may be, to enter into
and perform this  Agreement  and to purchase the  Securities  being sold to such
Investor  hereunder,  (ii) the execution and delivery of this  Agreement by such
Investor and the consummation by it of the transactions contemplated hereby have
been duly  authorized  by all  necessary  corporate or  partnership  action,  as
required,  and (iii) this Agreement constitutes the valid and binding obligation
of such Investor  enforceable  against such  Investor in  accordance  its terms,
except  as  such  enforceability  may  be  limited  by  applicable   bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting  generally the enforcement of creditors'  rights and remedies or by
other equitable principles of general application.

          (b) NO CONFLICTS.  The  execution,  delivery and  performance  of this
Agreement and the consummation by such Investor of the transactions contemplated
hereby  do not and  will  not  (i)  result  in a  violation  of such  Investor's
organizational  documents,  or (ii) conflict with any agreement,  indenture,  or
instrument to which such Investor is a party,  or (iii) result in a violation of
any law,  rule, or  regulation or any order,  judgment or decree of any court or
governmental  agency applicable to such Investor.  Such Investor is not required
to obtain any consent or authorization  of any governmental  agency in order for
it to perform its obligations under this Agreement.

                                       7
<PAGE>
          (c)  INVESTMENT  REPRESENTATION.   Such  Investor  is  purchasing  the
securities  purchased  hereunder  for its  own  account  and not  with a view to
distribution  in violation of any securities  laws. Such Investor has no present
intention to sell the  securities  purchased  hereunder and such Investor has no
present  arrangement  (whether  or not legally  binding) to sell the  Securities
purchased hereunder to or through any person or entity; provided,  however, that
by the  representations  herein, such Investor does not agree to hold any of the
Securities  for any minimum or other  specific  term and  reserves  the right to
dispose of any of the  Securities  at any time in  accordance  with  Federal and
state securities laws applicable to such disposition.

          (d) ACCREDITED INVESTOR.  Such Investor is an "accredited investor" as
defined in Rule 501  promulgated  under the Act. The Investor has such knowledge
and experience in financial and business  matters in general and  investments in
particular, so that such Investor is able to evaluate the merits and risks of an
investment  in the  securities  purchased  hereunder  and  to  protect  its  own
interests in connection with such investment.  In addition (but without limiting
the effect of the Company's  representations  and warranties  contained herein),
such  Investor  has  received  such  information  as it  considers  necessary or
appropriate for deciding whether to purchase the Securities purchased hereunder.

          (e) RULE  144.  Such  Investor  understands  that  there is no  public
trading market for the Warrants,  that none is expected to develop, and that the
Warrants must be held  indefinitely  unless  exercised or unless such securities
are  registered  under the Act or an exemption from  registration  is available.
Such Investor  understands  that the Common Stock and the Warrant Shares must be
held  indefinitely  unless such  securities are  registered  under the Act or an
exemption from  registration is available.  Such Investor has been advised or is
aware of the provisions of Rule 144 promulgated under the Act.

          (f) BROKERS.  Such  Investor has taken no action which would give rise
to any claim by any person for brokerage  commissions,  finder's fees or similar
payments  by  the  Company  relating  to  this  Agreement  or  the  transactions
contemplated hereby.

          (g) RELIANCE BY THE COMPANY. Such Investor understands that the Common
Stock is being offered and sold in reliance on a  transactional  exemption  from
the registration  requirements of Federal and state securities laws and that the
Company  is  relying  upon  the  truth  and  accuracy  of  the  representations,
warranties, agreements,  acknowledgments and understandings of such Investor set
forth herein in order to determine the  applicability of such exemptions and the
suitability of such Investor to acquire the Securities.

                                   ARTICLE III

                                    COVENANTS

     Section  3.1  REGISTRATION  AND  LISTING.   Until  the  expiration  of  the
Effectiveness  Period (as hereinafter  defined in Section 4.3), the Company will
cause the Common Stock to continue to be  registered  under Section 12(g) of the
Exchange  Act,  will  comply in all  respects,  with its  reporting  and  filing
obligations  under the  Exchange  Act,  and will not take any action or file any
document  (whether or not permitted by the Exchange Act or the rules thereunder)
to  terminate  or  suspend  such  reporting  and filing  obligations.  Until the

                                       8
<PAGE>
expiration of the Effectiveness  Period,  the Company shall use its best efforts
to continue  the listing or trading of the Common Stock on Nasdaq or a principal
exchange  (which  consists  exclusively  of the NYSE or AMEX) and  comply in all
respects with the Company's  reporting,  filing and other  obligations under the
bylaws or rules of Nasdaq or such principal exchange, as the case may be.

     Section 3.2 CERTIFICATES ON EXERCISE.  Upon the exercise of any Warrants in
accordance  with the terms of the Warrants,  the Company shall issue and deliver
to such  Investor  (or the then holder)  within  three (3) business  days of the
exercise date, (x) a Certificate or Certificates for the Warrant Shares issuable
upon such exercise and (y) a new certificate or certificates for the Warrants of
such  Investor  (or  holder)  which  have not yet been  exercised  but which are
evidenced in part by the  certificate(s)  submitted to the Company in connection
with  such  exercise  (with  the  number  of  and   denomination   of  such  new
certificate(s) designated by such Investor or holder).

     Section 3.3 REPLACEMENT CERTIFICATES.  The certificate(s)  representing the
shares of Common Stock,  Warrant Shares or the Warrants held by any Investor (or
then holder) may be exchanged by such  Investor (or such holder) at any time and
from time to time for certificates with different denominations  representing an
equal number of shares of Common Stock, Warrant Shares or Warrants,  as the case
may be,  as  reasonably  requested  by  such  Investor  (or  such  holder)  upon
surrendering  the same.  No service  charge will be made for such  registration,
transfer or exchange.

     Section 3.4 SECURITIES COMPLIANCE.  The Company shall notify the Commission
and  Nasdaq,  in  accordance  with  their  requirements,   of  the  transactions
contemplated  by this  Agreement  and the  Warrants  and  shall  take all  other
necessary  action and proceedings as may be required and permitted by applicable
law, rule and regulation, for the legal and valid issuance of the Securities.

     Section 3.5 RESERVATION OF STOCK ISSUABLE UPON EXERCISE.  The Company shall
at all times  reserve and keep  available  out of its  authorized  but  unissued
Common Stock,  solely for the purpose of affecting the exercise of the Warrants,
such number of shares of Common  Stock as shall from time to time be  sufficient
to effect the exercise of all outstanding Warrants.

                                   ARTICLE IV

                                  REGISTRATION

     Section  4.1  REGISTRATION  REQUIREMENTS.  The  Company  shall use its best
efforts to effect the  registration  of the Registrable  Securities  (including,
without  limitation,  the  execution of an  undertaking  to file  post-effective
amendments,  appropriate  qualification under applicable blue sky or other state
securities laws and appropriate  compliance with applicable  regulations  issued
under the  Securities  Act) as would  permit or  facilitate  the public  sale or
distribution of all the Registrable  Securities in the manner  (including manner
of sale)  and in all  states  reasonably  requested  by the  Holders.  Such best
efforts by the Company shall include the following:

          (a) The filing by the Company no later than thirty (30) days after the
Closing of a registration  statement or  registration  statements (as necessary)

                                       9
<PAGE>
with the  Commission  pursuant to Rule 415 under the  Securities Act on Form S-3
(or such other appropriate registration form if the Company is ineligible to use
Form  S-3)  covering  the  resale of the  Registrable  Securities  acquired  (or
underlying   the   Securities   so  acquired)  at  the  Closing   ("Registration
Statement(s)").  In the event  that  such  Registration  Statement  is not filed
within  thirty (30) days after the  Closing,  then the  Company  shall until the
Registration  Statement is filed,  pay in cash to each Holder an amount equal to
1.5% of the respective  purchase  price paid by such Holder (the  "Damages") for
each 30 day period beginning on the 31st day following the Closing Date at which
the  Registrable  Securities  were  acquired  (the  "Default  Period")  that the
Registration Statement has not been filed;  provided,  however, that the Default
Period shall  terminate and Damages shall cease to accrue on the date upon which
such  Registrable  Securities  may be sold under Rule  144(k) in the  reasonable
opinion of counsel to the Company  (provided  that the Company's  transfer agent
has accepted an instruction from the Company to such effect).  If any applicable
Default  Period is less than 30 days  such cash  payment  shall be on a pro rata
basis. The amount of such cash payment shall be calculated by the Company on the
earlier of (i) the  effective  date of such  Registration  Statement or (ii) the
last day of each Default  Period,  and a certified or bank check in lawful money
of the United  States of America shall be sent within three (3) business days of
such  calculation  to the address of each Holder as listed in the stock transfer
ledger  maintained  by the Company or its transfer  agent.  Notwithstanding  the
foregoing,  if the Default  Period  commences from the failure of the Company to
cause to be filed the Registration  Statement solely by reason of the failure of
any Holder to provide such information as (i) the Company may reasonably request
from such  Holder  to be  included  in the  Registration  Statement  or (ii) the
Commission or Nasdaq may request in connection with such Registration  Statement
(which request was provided to the Holder in writing) (the "Late  Holder"),  the
Company  shall  not be  required  to pay  such  Damages  to any of the  Holders;
provided,  that the Company shall file the Registration  Statement excluding the
Late Holder or take such other  action as  necessary  to cause the  Registration
Statement to be filed effective,  within two (2) business days after the initial
day of the original  Default  Period,  provided  that a new Default  Period will
commence  three (3) business days after the initial day of the original  Default
Period  if the  Registration  Statement  is not  filed.  The  Company  agrees to
promptly  file an amendment to such  Registration  Statement  including the Late
Holder once the requested information has been provided.

          (b) Prepare and file with the Commission  such  amendments  (including
post-effective  amendments) and supplements to such  Registration  Statement and
the prospectus  used in connection  with such  Registration  Statement as may be
necessary to keep such Registration  Statement effective at all times during the
Effectiveness  Period (as defined  below) and comply with the  provisions of the
Act  with  respect  to  the  disposition  of  all  securities  covered  by  such
Registration Statement and notify the Holders of the filing and effectiveness of
such  Registration  Statement and any amendments or supplements.  In the case of
amendments and supplements to a Registration  Statement which are required to be
filed  pursuant to this  Agreement  by reason of the Company  filing a report on
Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act,
the  Company  shall  have   incorporated  such  report  by  reference  into  the
Registration  Statement,  if  applicable,  or  shall  file  such  amendments  or
supplements with the Commission on the same day on which the Exchange Act report
is filed which  created the  requirement  for the Company to amend or supplement
the Registration Statement.

                                       10
<PAGE>
          (c)  Furnish  to each  Holder  such  numbers  of  copies  of a current
prospectus   conforming  with  the  requirements  of  the  Act,  copies  of  the
Registration  Statement,  any amendment or supplement  thereto and any documents
incorporated  by reference  therein and such other  documents as such Holder may
reasonably  require  in order  to  facilitate  the  disposition  of  Registrable
Securities owned by such Holder.

          (d) Use its best  efforts  to  register  and  qualify  the  securities
covered by such Registration Statement under such other securities or "Blue Sky"
laws of such  jurisdictions  as shall be  reasonably  requested  by each Holder;
provided that the Company shall not be required in connection  therewith or as a
condition  thereto to (i) qualify to do business where it would not otherwise be
required  to qualify,  (ii) file a general  consent to service of process in any
such states or jurisdictions,  (iii) make any change in the Company's charter or
By-Laws, or (iv) subject itself to general taxation in any such jurisdiction.

          (e) Notify each Holder  immediately of the happening of any event as a
result of which the prospectus  (including  any  supplement  thereto or thereof)
included in such Registration  Statement,  as then in effect, includes an untrue
statement  of  material  fact or omits to state a material  fact  required to be
stated  therein or necessary to make the  statements  therein not  misleading in
light of the circumstances  then existing,  and use its best efforts to promptly
update and/or correct such prospectus.

          (f) Notify each Holder  immediately  of the issuance by the Commission
or any state  securities  commission or agency of any stop order  suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose.  The Company shall use its reasonable  best efforts to prevent
the  issuance of any stop order and, if any stop order is issued,  to obtain the
lifting thereof at the earliest possible time.

          (g) Permit a single firm of counsel, designated as Holders' counsel by
the  Holders  of a  majority  of  the  Registrable  Securities  included  in the
Registration  Statement, to review the Registration Statement and all amendments
and supplements thereto within a reasonable period of time prior to each filing,
and shall  not file any  document  in a form to which  such  counsel  reasonably
objects,  provided  such  counsel  shall  provide  such  counsel's  comments  or
objection within three (3) business days after receipt of any document.

          (h) As of the date the Registration Statement is declared effective by
the Commission, the Company shall have caused the Registrable Securities covered
by such  Registration  Statement  to be listed with all  securities  exchange(s)
and/or markets on which the Common Stock is then listed,  and prepared and filed
any required filings with the National  Association of Securities Dealers,  Inc.
or any exchange or market where the Common Stock is traded.

          (i) The Company shall make  available  for  inspection by the Holders,
representative(s) of all the Holders together, any underwriter  participating in
any  disposition  pursuant  to a  Registration  Statement,  and any  attorney or
accountant  retained  by any  Holder or  underwriter,  all  financial  and other
records customary for purposes of the Holders' due diligence  examination of the
Company and all SEC Documents  filed  subsequent to the Closing Date,  pertinent
corporate  documents  and  properties  of the Company,  and cause the  Company's

                                       11
<PAGE>
officers, directors and employees to supply all information reasonably requested
by any such  representative,  underwriter,  attorney or accountant in connection
with such Registration Statement, provided that such parties agree to enter into
a Confidentiality  Agreement in the form and substance mutually agreeable to the
Company and the Investors.

          (j) The term "best efforts" as used in this  Agreement  shall include,
without limitation, that the Company shall submit to the Commission, within five
(5)  business  days  after the  Company  learns  that no review of a  particular
Registration  Statement  will be made by the staff of the Commission or that the
staff has no further comments on the Registration Statement, as the case may be,
a request for acceleration of effectiveness of such Registration  Statement to a
time and date not later than 72 hours after the submission of such request.

     Section 4.2 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration,  qualification or compliance with registration
pursuant  to this  Section  4 shall  be borne by the  Company,  and all  Selling
Expenses of a Holder shall be borne by such Holder.

     Section 4.3 REGISTRATION  PERIOD. In the case of the registration  effected
by the Company pursuant to this Section 4, the Company will use its best efforts
to keep such  registration  effective  (the  "Effectiveness  Period")  until the
earlier to occur of (a) one year from the Closing Date, provided,  however, that
the period of time which such Registration Statement is required to be effective
shall be  increased  by the  number  of days that the  Registration  Statement's
effectiveness was suspended, if any, during the one year period from the Closing
Date,  (b) the  date on  which  all the  Holders  have  completed  the  sales or
distributions  of  the  Registrable  Securities  included  in  the  Registration
Statement or, (c) the date on which such  Registrable  Securities of all Holders
may be  sold  without  restriction  under  Rule  144(k)  promulgated  under  the
Securities Act (or any successor  thereto) in the reasonable  opinion of counsel
to the Company  (provided  that the  Company's  transfer  agent has  accepted an
instruction  from  the  Company  to such  effect  and  will  issue  certificates
representing such Registrable Securities without any legend endorsed thereon).

     Section 4.4 OBLIGATION OF HOLDER. It shall be a condition  precedent to the
obligations  of the  Company  to  complete  the  registration  pursuant  to this
Agreement with respect to Registrable Securities of the Holder that:

          (a)  the  Holder  by  such  Holder's  acceptance  of  the  Registrable
Securities  agrees to cooperate with the Company as reasonably  requested by the
Company  in  connection  with the  preparation  and  filing of any  Registration
Statement  hereunder,  unless the Holder has  notified the Company in writing of
the Holder's election to exclude all of the Holder's Registrable Securities from
such Registration Statement.

          (b) the Holder shall furnish to the Company such information regarding
the  Holder,  the  Registrable  Securities  held by the Holder and the  intended
method of disposition of the Registrable  Securities held by the Holder as shall
be reasonably required to effect the registration of such Registrable Securities
and the Holder shall execute such documents as are customary in connection  with
such registration as the Company may reasonably request.

                                       12
<PAGE>
     Section 4.5 INDEMNIFICATION.

          (a) COMPANY INDEMNITY. The Company will indemnify each Holder, each of
its officers,  directors and partners,  and each person controlling each Holder,
within  the  meaning  of  Section  15 of the  Securities  Act and the  rules and
regulations  thereunder  with respect to which  registration,  qualification  or
compliance has been effected  pursuant to this Agreement,  and each underwriter,
if any,  and each person who  controls,  within the meaning of Section 15 of the
Securities  Act and the  rules  and  regulations  thereunder,  any  underwriter,
against  all claims,  losses,  damages  and  liabilities  (or actions in respect
thereof)  arising out of or based on any untrue  statement  (or  alleged  untrue
statement) of a material fact contained in any prospectus,  offering circular or
other document (including any related  registration  statement,  notification or
the like) incident to any such  registration,  qualification  or compliance,  or
based on any omission (or alleged  omission)  to state  therein a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading,  or any violation by the Company of the  Securities Act or any state
securities law or in either case, any rule or regulation  thereunder  applicable
to the  Company and  relating  to action or inaction  required of the Company in
connection with any such  registration,  qualification  or compliance,  and will
reimburse each Holder,  each of its officers,  directors and partners,  and each
person  controlling  such  Holder,  each such  underwriter  and each  person who
controls any such underwriter,  for any legal and any other expenses  reasonably
incurred in connection with  investigating  and defending any such claim,  loss,
damage, liability or action, provided that the Company will not be liable in any
such case to a Holder to the extent that any such claim, loss, damage, liability
or expense  arises out of or is based on any untrue  statement or omission based
upon  written  information  furnished  to the  Company  by  such  Holder  or the
underwriter (if any) therefor and stated to be specifically for use therein. The
indemnity  agreement contained in this Section 4.5(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage,  liability or action if such
settlement is effected  without the consent of the Company  (which  consent will
not be unreasonably withheld).

          (b) HOLDER INDEMNITY.  Each Holder will, severally and not jointly, if
Registrable  Securities  held by it are included in the  securities  as to which
such registration,  qualification or compliance is being effected, indemnify the
Company, each of its directors,  officers,  partners,  and each underwriter,  if
any, of the Company's  securities covered by such registration  statement,  each
person who  controls  the  Company  or such  underwriter  within the  meaning of
Section 15 of the Securities Act and the rules and regulations thereunder,  each
other Holder (if any), and each of their directors,  officers and partners,  and
each person controlling such other Holder(s) against all claims, losses, damages
and liabilities (or actions in respect  thereof)  arising out of or based on any
untrue  statement (or alleged untrue  statement) of a material fact contained in
any  such  registration  statement,   prospectus,  offering  circular  or  other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated  therein or  necessary to make the  statement  therein not
misleading, in each case only insofar as such untrue statement or alleged untrue
statement or omission relates to such Holder, and will reimburse the Company and
such other Holder(s) and their directors, officers and partners, underwriters or
control  persons  for any legal or any other  expenses  reasonably  incurred  in
connection  with  investigating  and  defending  any such claim,  loss,  damage,
liability or action,  in each case to the extent,  but only to the extent,  that
such untrue  statement  (or alleged  untrue  statement)  or omission (or alleged
omission) is made in such registration statement,  prospectus, offering circular
or other  document in reliance upon and in conformity  with written  information

                                       13
<PAGE>
furnished  to the Company by such Holder and stated to be  specifically  for use
therein,  and  provided  that the maximum  amount for which such Holder shall be
liable under this indemnity  shall not exceed the net proceeds  received by such
Holder from the sale of the  Registrable  Securities.  The  indemnity  agreement
contained in this Section  4.5(b) shall not apply to amounts paid in  settlement
of any such  claims,  losses,  damages  or  liabilities  if such  settlement  is
effected  without  the  consent  of  such  Holder  (which  consent  will  not be
unreasonably withheld).

          (c)  PROCEDURE.  Each party  entitled  to  indemnification  under this
Article (the  "Indemnified  Party")  shall give notice to the party  required to
provide   indemnification   (the  "Indemnifying   Party")  promptly  after  such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought,  and shall  permit the  Indemnifying  Party to assume the defense of any
such claim in any litigation resulting therefrom,  provided that counsel for the
Indemnifying  Party,  who  shall  conduct  the  defense  of  such  claim  or any
litigation  resulting  therefrom,  shall be  approved by the  Indemnified  Party
(whose approval shall not be unreasonably  withheld),  and the Indemnified Party
may participate in such defense at such party's  expense,  and provided  further
that the failure of any  Indemnified  Party to give  notice as  provided  herein
shall not relieve the Indemnifying  Party of its obligations  under this Article
except to the extent that the  Indemnifying  Party is  materially  and adversely
affected  by such  failure to provide  notice.  No  Indemnifying  Party,  in the
defense of any such claim or litigation,  shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which  does not  include  as an  unconditional  term  thereof  the giving by the
claimant or plaintiff to such Indemnified  Party of a release from all liability
in respect to such claim or  litigation.  Each  Indemnified  Party shall furnish
such  information  regarding  itself or the claim in question as an Indemnifying
Party may reasonably  request in writing and as shall be reasonably  required in
connection with the defense of such claim and litigation resulting therefrom.

     4.6 CONTRIBUTION.  If the indemnification  provided for in Section 4 herein
is  unavailable  to the  Indemnified  Parties in respect of any losses,  claims,
damages  or  liabilities  referred  to  herein  (other  than  by  reason  of the
exceptions  provided  therein),  then each such  Indemnifying  Party, in lieu of
indemnifying  such  Indemnified  Party,  shall  contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities  as between the Company on the one hand and any Holder on the other,
in such  proportion  as is  appropriate  to reflect  the  relative  fault of the
Company and of such Holder in connection  with the statements or omissions which
resulted in such losses,  claims,  damages or liabilities,  as well as any other
relevant equitable considerations.  The relative fault of the Company on the one
hand and of any Holder on the other shall be  determined  by reference to, among
other things,  whether the untrue or alleged untrue statement of a material fact
or omission or alleged  omission to state a material fact relates to information
supplied by the Company or by such Holder.

     In no event shall the  obligation of any  Indemnifying  Party to contribute
under this Section 4.6 exceed the amount that such Indemnifying Party would have
been obligated to pay by way of indemnification if the indemnification  provided
for  under  Section  4.5(a)  or  4.5(b)  hereof  had been  available  under  the
circumstances.

                                       14
<PAGE>
     The Company and the Holders  agree that it would not be just and  equitable
if  contribution  pursuant  to this  Section  4.6  were  determined  by PRO RATA
allocation (even if the Holders or the  underwriters  were treated as one entity
for such  purpose)  or by any other  method of  allocation  which  does not take
account of the equitable considerations referred to in the immediately preceding
paragraphs.  The amount paid or payable by an  Indemnified  Party as a result of
the losses,  claims,  damages  and  liabilities  referred to in the  immediately
preceding paragraphs shall be deemed to include,  subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection  with  investigating  or defending any such action or claim.
Notwithstanding  the provisions of this section,  no Holder or underwriter shall
be required to contribute any amount in excess of the an amount which equals (i)
in the case of any  Holder,  the net  proceeds  received by such Holder from the
sale  of  Registrable  Securities  or (ii) in the  case of an  underwriter,  the
underwriting discount applicable to the securities purchased by the underwriter.
No person guilty of fraudulent  misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to  contribution  from any person
who was not guilty of such fraudulent misrepresentation.

                                    ARTICLE V

                                   CONDITIONS

     Section 5.1 CONDITIONS  PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE
AND SELL THE  SECURITIES.  The obligation  hereunder of the Company to issue and
sell  the  Common  Stock  and  Warrants  to  the  Investors  is  subject  to the
satisfaction, at or before the Closing Date, of each of the conditions set forth
below.  These conditions are for the Company's sole benefit and may be waived by
the Company at any time in its sole discretion.

          (a) ACCURACY OF THE INVESTORS'  REPRESENTATIONS  AND  WARRANTIES.  The
representations and warranties of each Investor shall be true and correct in all
material  respects as of the date when made and as of the Closing Date as though
made at that time (except for  representations and warranties that speak as of a
particular date).

          (b)  PERFORMANCE BY THE INVESTORS.  Each Investor shall have performed
all agreements and satisfied all conditions  required  hereby to be performed or
satisfied by such Investor at or prior to the Closing Date.

          (c) NO INJUNCTION.  No statute,  rule,  regulation,  executive  order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent jurisdiction which
prohibits  the  consummation  of any of the  transactions  contemplated  by this
Agreement.

          (d)  EXECUTION OF  AGREEMENT.  The Company  shall have  signified  its
acceptance of the Investors subscription to purchase the Securities by executing
this Agreement.

     Section 5.2  CONDITIONS  PRECEDENT TO THE  OBLIGATION  OF THE  INVESTORS TO
PURCHASE THE STOCK AND THE WARRANTS.  The obligation  hereunder of each Investor
to  acquire  and pay  for the  Common  Stock  and  Warrants  is  subject  to the
satisfaction, at or before the Closing Date, of each of the conditions set forth
below.  These  conditions are for each Investor's sole benefit and may be waived
by each Investor at any time in its sole discretion.

                                       15
<PAGE>
          (a) ACCURACY OF THE  COMPANY'S  REPRESENTATIONS  AND  WARRANTIES.  The
representation  and  warranties  of the Company shall be true and correct in all
material  respects as of the date when made and as of the Closing Date as though
made at that time (except for  representations and warranties that speak as of a
particular date).

          (b)  PERFORMANCE BY THE COMPANY.  The Company shall have performed all
agreements and satisfied all conditions required to be performed or satisfied by
the Company at or prior to the Closing Date.

          (c) NASDAQ.  From the date hereof to the Closing Date,  trading in the
Company's Common Stock shall not have been suspended by the Commission or Nasdaq
and trading in securities  generally as reported by Nasdaq,  shall not have been
suspended or limited, and the Common Stock shall not have been delisted from any
exchange or market where they are currently listed.

          (d) NO INJUNCTION.  No statute,  rule,  regulation,  executive  order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority or competent jurisdiction which
prohibits  the  consummation  of any of the  transactions  contemplated  by this
Agreement.

          (e) MINIMUM  SUBSCRIPTION.  An  aggregate of  $5,266,250  of shares of
Common  Stock  shall  have been  purchased  by the  Investors  pursuant  to this
Agreement.

          (f) SECRETARY'S  CERTIFICATE.  The Company shall have delivered to the
Investors a certificate  in form and substance  reasonably  satisfactory  to the
Investors,  executed by the  Secretary  of the Company on behalf of the Company,
certifying  as to the  satisfaction  of all closing  conditions,  incumbency  of
signing officers, charter, By-Laws, good standing and authorizing resolutions of
the Company.

                                   ARTICLE VI

                                LEGEND AND STOCK

     Section 6.1. LEGEND AND STOCK.  Each  certificate  representing  the Common
Stock,  the  Warrants  and the  Warrant  Shares  shall be stamped  or  otherwise
imprinted with a legend substantially in the following form:

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR QUALIFIED UNDER ANY STATE SECURITIES LAWS.
THE  SECURITIES  MAY NOT BE  OFFERED,  SOLD,  PLEDGED,  HYPOTHECATED,  ASSIGNED,
TRANSFERRED  OR  OTHERWISE  DISPOSED OF EXCEPT (I)  PURSUANT  TO A  REGISTRATION
STATEMENT  UNDER THE  SECURITIES  ACT WHICH HAS BECOME  EFFECTIVE AND IS CURRENT
WITH RESPECT TO THESE  SECURITIES OR (II) PURSUANT TO A SPECIFIC  EXEMPTION FROM
REGISTRATION  UNDER THE  SECURITIES  ACT,  BUT ONLY UPON A HOLDER  HEREOF  FIRST
HAVING OBTAINED THE WRITTEN  OPINION OF COUNSEL OF THE ISSUER,  OR OTHER COUNSEL
REASONABLY ACCEPTABLE TO THE ISSUER, THAT THE PROPOSED DISPOSITION IS CONSISTENT
WITH ALL  APPLICABLE  PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE
"BLUE SKY" OR SIMILAR SECURITIES LAW.

                                       16
<PAGE>
                                   ARTICLE VII

                                   TERMINATION

     Section 7.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
at any time  prior to the  Closing  Date by the  mutual  written  consent of the
Company and the Investors.

     Section 7.2 OTHER  TERMINATION.  This Agreement may be terminated by action
of the Board of Directors of the Company or by any of the  Investors at any time
if the Closing Date shall not have been  consummated  by the third  business day
following the date of this Agreement.

                                  ARTICLE VIII

                                  MISCELLANEOUS

     Section 8.1 STAMP TAXES;  AGENT FEES.  The Company  shall pay all stamp and
other  taxes and duties  levied in  connection  with the  issuance of the Common
Stock and the  Warrants  pursuant  hereto and the  Warrant  Shares  issued  upon
exercise of the Warrants.

     Section 8.2 SPECIFIC ENFORCEMENT; CONSENT TO JURISDICTION.

          (a)  The  Company  and  the  Investors   acknowledge  and  agree  that
irreparable  damage would occur in the event that any of the  provisions of this
Agreement  were not performed in accordance  with their  specific  terms or were
otherwise breached.  It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof, this
being in  addition  to any other  remedy to which any of them may be entitled by
law or equity.

          (b) The  Company  and each of the  Investors  (i)  hereby  irrevocably
submits to the exclusive  jurisdiction of the United States District Court,  the
Arizona State courts and other courts of the United  States  sitting in Maricopa
County,  Arizona for the purposes of any suit, action or proceeding  arising out
of or  relating to this  Agreement  and (ii)  hereby  waives,  and agrees not to
assert  in any  such  suit,  action  or  proceeding,  any  claim  that it is not
personally  subject to the jurisdiction of such court,  that the suit, action or
proceeding  is brought in an  inconvenient  forum or that the venue of the suit,
action or proceeding is improper. The Company and each of the Investors consents
to process being served in any such suit, action or proceeding by mailing a copy
thereof  to such party at the  address  in effect  for  notices to it under this
Agreement  and agrees that such service  shall  constitute  good and  sufficient
service of process and notice thereof. Nothing in this paragraph shall affect or
limit any right to serve process in any other manner permitted by law.

     Section 8.3 ENTIRE AGREEMENT;  AMENDMENT.  This Agreement together with the
agreements and documents  executed in connection  herewith,  contains the entire
understanding  of the parties  with respect to the matters  covered  hereby and,
except as  specifically  set forth herein,  neither the Company nor any Investor

                                       17
<PAGE>
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by a
written  instrument  signed by the party  against whom  enforcement  of any such
amendment or waiver is sought.

     Section 8.4 NOTICES. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this  Agreement  must be in
writing  and will be deemed  to have  been  delivered:  (i) upon  receipt,  when
delivered  personally;  (ii)  upon  receipt,  when sent by  facsimile  (provided
confirmation of transmission  is  mechanically or  electronically  generated and
kept on file by the sending party); or (iii) one business day after deposit with
a  nationally  recognized  overnight  delivery  service,  in each case  properly
addressed to the party to receive the same. The addresses and facsimile  numbers
for such communications shall be:

         to the Company:   Amtech Systems, Inc.
                           131 South Clark Drive
                           Tempe, Arizona  85281
                           Telephone: (480) 967-5146
                           Facsimile: (480) 968-3763
                           E-Mail: rthass@amtechsystems.com
                           Attn: Robert T. Hass
                                 Vice President and Chief Financial Officer

         with copies to:   Squire, Sanders & Dempsey L.L.P.
                           Two Renaissance Square
                           40 North Central Avenue, Suite 2700
                           Phoenix, Arizona  85004-4498
                           Telephone: (602) 528-4134
                           Facsimile: (602) 253-8129
                           E-Mail: ghall@ssd.com
                           Attn: Gregory R. Hall, Esq.

         to the Investors: To each Investor and its representative at the
                           addresses set forth on SCHEDULE I of this Agreement.

Any party  hereto may from time to time change its address for notices by giving
at least 5 days  written  notice of such  changed  address to the other  parties
hereto.  Written  confirmation  of receipt  (A) given by the  recipient  of such
notice,   consent,   waiver  or  other   communication,   (B)   mechanically  or
electronically  generated by the sender's facsimile machine containing the time,
date,  recipient  facsimile  number  and an  image  of the  first  page  of such
transmission  or (C)  provided by a  nationally  recognized  overnight  delivery
service shall be rebuttable  evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above.

     Section 8.5 INDEMNITY.  Each party shall indemnify each other party against
any loss, cost or damages  (including  reasonable  attorney's fees but excluding
consequential  damages)  incurred  as a result  of such  parties'  breach of any
representation, warranty, covenant or agreement in this Agreement.

                                       18
<PAGE>
     Section 8.6 WAIVERS.  No waiver by any party of any default with respect to
any provision,  condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provision,  condition
or requirement  hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.

     Section 8.7 HEADINGS.  The headings herein are for convenience only, do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof.

     Section 8.8 SUCCESSORS AND ASSIGNS.  Except as otherwise  provided  herein,
this Agreement shall be binding upon and inure to the benefit of the parties and
their  successors  and  permitted  assigns.  The  parties  hereto may amend this
Agreement  without notice to or the consent of any third party.  The Company may
not assign this  Agreement or any rights or  obligations  hereunder  without the
prior written  consent of all Investors  (which  consent may be withheld for any
reason in their sole  discretion),  except  that the  Company  may  assign  this
Agreement in connection with a merger,  consolidation,  business  combination or
the sale of all or substantially  all of its assets provided that the Company is
not released from any of its obligations  hereunder,  such successor in interest
or assignee  assumes all obligations of the Company  hereunder,  and appropriate
adjustment of the  provisions  contained in this  Agreement is made, in form and
substance satisfactory to the Investors, to place the Investors in substantially
the same position as they would have been but for such assignment.  Any Investor
may assign  this  Agreement  (in whole or in part) or any rights or  obligations
hereunder  with  the  consent  of the  Company  in  connection  with any sale or
transfer of all or any portion of the Securities held by such Investor.

     Section 8.9 NO THIRD PARTY  BENEFICIARIES.  This  Agreement is intended for
the benefit of the parties hereto and their respective  permitted successors and
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other person.

     Section  8.10  GOVERNING  LAW.  This  Agreement  shall be  governed  by and
construed  and enforced in  accordance  with the  internal  laws of the State of
Arizona without regard to such state's principles of conflict of laws.

     Section  8.11  SURVIVAL.   The   representations  and  warranties  and  the
agreements and covenants of the Company and each Investor contained herein shall
survive the Closing.

     Section  8.12  EXECUTION.  This  Agreement  may be  executed in two or more
counterparts,  all of which shall be considered one and the same  agreement,  it
being understood that all parties need not sign the same counterpart.

     Section 8.13 PUBLICITY.  The Company agrees that it will not disclose,  and
will not include in any public  announcement,  the name of any Investor  without
its consent,  unless and until such  disclosure is required by law or applicable
regulation, and then only to the extent of such requirement.

     Section  8.14  SEVERABILITY.  The  parties  acknowledge  and agree that the
Investors  are not  agents,  affiliates  or  partners  of each  other,  that all
representations, warranties, covenants and agreements of the Investors hereunder

                                       18
<PAGE>
are several and not joint,  that no Investor  shall have any  responsibility  or
liability for the representations,  warrants,  agreements,  acts or omissions of
any other Investor,  and that any rights granted to "Investors"  hereunder shall
be enforceable by each Investor hereunder.

     Section 8.15 LIKE TREATMENT OF HOLDERS.  Neither the Company nor any of its
affiliates  shall,  directly  or  indirectly,  pay  or  cause  to  be  paid  any
consideration,  whether by way of interest,  fee,  payment for the redemption or
exchange of Securities, or otherwise, to any holder of Securities,  for or as an
inducement to, or in connection with the solicitation of, any consent, waiver or
amendment of any terms or provisions of the Securities or this Agreement, unless
such  consideration is required to be paid to all holders of Securities bound by
such consent,  waiver or amendment whether or not such holders so consent, waive
or agree to amend and whether or not such holders  tender their  Securities  for
redemption or exchange.  The Company shall not,  directly or indirectly,  redeem
any  Securities  unless such offer of redemption is made pro rata to all holders
of Securities on identical terms.

     Section  8.16  COMPANY  ACKNOWLEDGEMENT.  Anything  in  this  Agreement  or
elsewhere herein to the contrary notwithstanding, it is understood and agreed by
the Company (1) that the undersigned  Investor has not been asked to agree,  nor
has he  agreed,  to desist  from  purchasing  or  selling,  long  and/or  short,
securities issued by the Company, or "derivative" securities based on securities
issued by, the Company or to hold the Securities  purchased from the Company for
any specified term; (2) that past or future open market or other transactions by
Investor, including short sales, and specifically including, without limitation,
short sales or "derivative" transactions, before or after the closing of this or
future private placement transactions, may negatively impact the market price of
the Company's publicly-traded securities; (3) that Investor, and counter parties
in  "derivative"  transactions  to  which  Investor  is  a  party,  directly  or
indirectly,  presently have a "short" position in the Common Stock, and (4) that
Investor  shall not be deemed to have any  affiliation  with or control over any
arm's length counter-party in any "derivative" transaction."

                                       18
<PAGE>
     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed as of the date first above written.

                                     AMTECH SYSTEMS, INC.

                                     By:
                                         ---------------------------------------
                                         Name: Robert T. Hass
                                         Title: Vice President and Chief
                                                Financial Officer

                                     INVESTOR:

                                     By:
                                         ---------------------------------------
                                         Name:
                                         Title:

Exact Name in Which Securities Should
be registered: ________________________________
<PAGE>
                                   SCHEDULE I

                                                           NO. OF
                                                         SHARES OF       NO. OF
NAME AND ADDRESS OF INVESTOR           PURCHASE PRICE   COMMON STOCK    WARRANTS
----------------------------           --------------   ------------    --------

Gryphon Partners, L.P.                 $   343,750.00       25,000        2,500
500 Crescent Court, Suite 270
Dallas, TX  75201
Tax ID 75-1925465

Scout Mountain LP                      $   137,000.00       10,000        1,000
153 East 53rd Street
New York, NY 10022
Tax ID: 13-4127353

Scout Capital Partners, LP             $   550,000.00       40,000        4,000
153 East 53rd Street
New York, NY 10022
Tax ID: 13-4069903

Lancaster Investment Partners, LP      $   550,000.00       40,000        4,000
1150 First Avenue, Suite 600
King of Prussia, PA  19406
Tax ID: 23-2851646

Robert A. Berlacher                    $   247,500.00       18,000        1,800
676 Church Road
Villanova, PA  19085
SSN: ###-##-####

North Olmsted Partners, LP             $ 1,375,000.00      100,000       10,000
535 Madison Avenue, 15th floor
New York, NY  10022
Tax ID: 95-4432823

Strong River Investments, Inc.         $   999,625.00       72,700        7,270
c/o Cavallo Capital Corp.
660 Madison Ave, 18th Floor
New York, NY 10021

                                   Sched I-1
<PAGE>
Bay Harbor Investments, Inc.           $   499,125.00       36,300        3,630
c/o Gonzalez-Ruiz & Aleman (BVI) Ltd.
Vanterpool Plaza, Wickams Cay I
P.O. Box 873
Road Town, Tortola, BVI
Tax ID: N/A

Managed Risk Trading, LP               $   398,750.00       29,000        2,900
120 Broadway, Suite 1050
New York, NY 10271
Tax ID:  ________________

Redwood Partners LLC                   $    99,000.00        7,200          720
111 Broadway, 2nd Floor
New York, NY 10006
Tax ID:  ________________

VFT Special Ventures, LP               $    66,000.00        4,800          480
1150 First Avenue, Suite 600
King of Prussia, PA 19406
Tax ID:  23-3007881
                                       --------------      -------       ------
                            Total      $ 5,266,250.00      383,000       38,300

                                   Sched I-1
<PAGE>
                                 SCHEDULE 2.1(M)

                                   LITIGATION

On or about  August 31,  2000,  the Company  learned  that a company  named P.R.
Hoffman  Machine  Products was one of 11 companies named in a legal action being
brought by North Middleton  Township in Carlisle,  Pennsylvania,  the owner of a
landfill allegedly found to be contaminated.  This information was reported in a
local  newspaper.  To date,  the  Company's  subsidiary,  P.R.  Hoffman  Machine
Products,  Inc., has not been served with any lawsuit.  The Company acquired the
assets of P.R.  Hoffman  Machine  Products  Corporation in an asset  transaction
consummated  on or about  July 1,  1997.  Under the terms of the Asset  Purchase
Agreement  governing such transaction,  the seller is obligated to indemnify the
Company  for any  breaches of the  representations  and  warranties  thereunder,
including representations relating to environmental matters.

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