Document:

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                                                                    Exhibit 10.2

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                          August Technology Corporation
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                            INTERNATIONAL DISTRIBUTOR

                                    AGREEMENT

This Agreement is made as of the 14th day of June , 1999, between AUGUST
TECHNOLOGY CORPORATION, a Minnesota (USA) corporation with a principal place of
business at 5237 Edina Industrial Blvd., Edina, Minnesota 55439, USA, (hereafter
referred to as "August Technology") and MARUBENI SOLUTIONS CORPORATION, an
entity organized and existing under the laws of Japan, having its principal
place of business 1-26-20, Higashi, Shibuya-ku, Tokyo 150-0011 Japan (hereafter
referred to as "Distributor").

In consideration of the mutual covenants and agreements hereinafter set forth,
the parties agree as follows:

The following are the terms and conditions under which August Technology sells
and licenses its image inspection technology, vision system controlled
manufacturing tools, licensed software programs, and related spare parts
specified in Exhibit-A (hereinafter jointly referred to as "Product" or "
Products"). Distributor wishes to purchase all or selected Products for resale
and commits to actively provide its customers the necessary service and support
to successfully market and maintain the Products in the assigned territory.

1.       DEFINITIONS

         The terms listed below will have the following meaning, unless the
context clearly indicates otherwise:

         1.1      "AGREEMENT" will mean this International Distributor Agreement
                  and all Exhibits.

         1.2      "COMPETITIVE PRODUCTS" will mean image inspection technology,
                  vision system controlled manufacturing tools, licensed
                  software programs, and related spare parts, of substantially
                  the same functionality Products..

         1.3      "PRICE LIST" will mean the published prices that August
                  Technology shall issue from time to time.

         1.4      "TERRITORY" will mean the countries specified in Exhibit-C.

         1.5      "MIE" will mean Marubeni Solutions Corporation's subsidiary in
                  the USA. Specifically, Marubeni International Electronics
                  Corporation with a principal place of business at 790 Lucerne
                  Drive, Sunnyvale, California, 94086.

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2.       APPOINTMENT AS DISTRIBUTOR

         August Technology hereby appoints Distributor as an authorized,
         independent, exclusive Distributor for the Products, for the purpose of
         reselling and servicing the Products directly to its customers in the
         Territory. Distributor agrees that it will re-sell Products directly,
         without the use of any dealers, sub-agents, and the like except with
         August Technology's express written consent.

3.       TERM OF AGREEMENT

         This Agreement will remain in effect during one (1) year period after
         the signed date on this agreement by both parties, and then shall be
         automatically renewed thereafter on a year-to-year basis unless
         otherwise terminated hereunder. Termination may be made at any time by
         either party by providing written notice at least 6 months prior to the
         intended termination date.

4.       TERRITORY

         Distributor will have the exclusive right to actively market, sell, and
         promote the Products in the Territory (see Exhibit-C).

5.       RESTRICTIONS

         5.1      Distributor agrees not to make any sale, transfer, exchange,
                  or other conveyance of any Products whatsoever to any person
                  that Distributor knows, or has reason to know, is purchasing
                  such Products for the purpose of resale without first
                  notifying August Technology for written approval.

         5.2      Distributor will have no rights to the Products, any software
                  included in the Products, or any improvements in the Products.
                  Distributor agrees not to copy, manufacture, re-manufacture,
                  or otherwise modify any Products without the written consent
                  from August Technology (signed by an officer of the company).
                  If Distributor is permitted to modify Products to conform to
                  customer requests or specifications, such modifications must
                  not degrade the original August Technology operating
                  specifications or impede the reliability of the Products. Any
                  modifications performed in violation of this Section 5.2 will
                  void all warranties.

         5.3      Distributor agrees not to promote, market, or sell any
                  Competitive Products or services, directly or indirectly,
                  within the Territory with the exception of Products that
                  Distributor has a Tight to distribute in the Territory on the
                  date of this Agreement. If any equipment supplier to
                  Distributor develops or promotes a Competitive product to
                  August Technology's products, Distributor agrees to
                  immediately notify August Technology in writing of this
                  conflict (including a proposed resolution to the conflict).
                  Distributor agrees not to establish a branch office or other
                  entity or association with plans to distribute Products
                  outside the

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                  Territory, or to appoint any sub-Distributor outside the
                  Territory except with express written consent by August
                  Technology.

6.       PRICE, PAYMENT, TAXES, DUTY & COMMISSION

         6.1      Prices for the Products purchased under this Agreement will be
                  as specified in Exhibit-B. August Technology will have the
                  right at any time to change its prices and must provide
                  Distributor with a Sixty (60) day advance written notice of
                  any pricing changes. Price changes will not apply to unfilled
                  purchase orders that have been accepted by August Technology
                  prior to the effective date of the price change.

         6.2      Payment by Distributor will be made by bank check in U.S.
                  Dollars issued by Distributor's subsidiary Marubeni
                  International Electronics Corp. ("MIE") to August Technology
                  under the payment terms agreed to as part of this Agreement
                  (see Exhibit-B). All bank checks will be forwarded to August
                  Technology via over night "Express Mail Service". Tracking
                  number will be advised by Marubeni International Electronics
                  Corp upon delivery.

         6.3      Product prices are to be stated in U.S. Dollars and are
                  Ex-works (as defined by Incoterms 1990) exclusive of all
                  sales, use, and like taxes. Distributor agrees to pay all
                  freight, storage fees, bank transfer fees, and all taxes and
                  duties associated with the sale of Products purchased under
                  this Agreement.

         6.4      All risk of loss to Products will pass to Distributor upon
                  surrender by August Technology to the carrier at the point of
                  shipment (Edina, Minnesota, USA.) MIE agrees to make all
                  arrangements for export, select the carrier, and insure
                  Products against loss, damage, theft, or destruction upon
                  surrender to the carrier at August Technology's facility.

         6.5      Both Distributor and August Technology agrees that a customer
                  order has three primary components: (1) project/equipment
                  specification, (2) purchasing/negotiations, and (3)
                  In-Warranty service support. The Distributor's purchasing
                  discount from the August Technology published list price will
                  be effected by these primary components (see Table-1 and
                  Exhibit-D).

TABLE-1: Equipment Discount Schedule

<TABLE>
<CAPTION>
          ----------------- ----------------------- --------------------- ---------------------- --------------------
               ORDER            LOCATION WHERE         LOCATION WHERE        LOCATION WHERE         % OF STANDARD
            POSSIBILITY       PROJECT SPECIFIED         P.O. ISSUED         EQUIP. INSTALLED       EQUIP. DISCOUNT
          ----------------- ----------------------- --------------------- ---------------------- --------------------
          <S>               <C>                     <C>                   <C>                    <C>
                 1                Territory              Territory              Territory               100%
          ----------------- ----------------------- --------------------- ---------------------- --------------------
                 2                Territory              Territory          Not In Territory           66 2/3%
          ----------------- ----------------------- --------------------- ---------------------- --------------------
                 3             Not In Territory          Territory              Territory              66 2/3%
          ----------------- ----------------------- --------------------- ---------------------- --------------------
                 4                Territory           Not In Territory          Territory              66 2/3%
          ----------------- ----------------------- --------------------- ---------------------- --------------------
                 5                Territory           Not In Territory      Not In Territory           33 1/3%
          ----------------- ----------------------- --------------------- ---------------------- --------------------
                 6             Not In Territory          Territory          Not In Territory           33 1/3%
          ----------------- ----------------------- --------------------- ---------------------- --------------------
                 7             Not In Territory       Not In Territory          Territory              33 1/3%
          ----------------- ----------------------- --------------------- ---------------------- --------------------
                 8             Not In Territory       Not In Territory      Not In Territory             0%
          ----------------- ----------------------- --------------------- ---------------------- --------------------
</TABLE>

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7.       PURCHASE ORDERS, SHIPMENTS, CANCELLATIONS & CHANGES

         7.1      In order to receive Products, Distributor agrees to deliver to
                  August Technology a hard copy purchase order through MIE. All
                  Distributor purchase orders are subject to acceptance at
                  August Technology. All purchase orders issued by Distributor
                  will include the following information:

                  (a)      Final customer's name (end-user), and location, and
                           customer's official purchase order (P.O.) number (If
                           and when customer's PO number is available).
                  (b)      Distributor purchase order number
                  (c)      "Ship To" location (generally Marubeni International
                           Electronics Corporation address)
                  (d)      "Bill To" location (generally Marubeni International
                           Electronics Corporation address) and accounts payable
                           contact person
                  (e)      Method of shipment, including contact person and
                           telephone number
                  (f)      Quantity and description of each item being purchased
                  (g)      Details of any options purchased
                  (h)      Pricing
                  (i)      Requested ship date(s)
                  (j)      Power requirements
                  (k)      Environmental requirements - if any (such as
                           cleanroom specifications)
                  (l)      Any other special requirements, such as customer part
                           or device drawings and samples. Distributor will
                           submit a completed "order sheet" indicating in detail
                           the power, environmental and any other special
                           requirements such as customer part or device
                           drawings.

                  August Technology reserves the right to reject any order that
                  does not conform to the provisions of this Agreement. All
                  orders accepted for delivery will be governed exclusively by
                  the terms and conditions of this Agreement and its
                  incorporated Exhibits. Unless August Technology expressly
                  agrees in writing, no additional or different terms and
                  conditions appearing on the face or reverse side of any order
                  issued by Distributor will become part of such order.

         7.2      No purchase order will be binding on August Technology until
                  accepted by August Technology in writing. August Technology
                  agrees to use its reasonable best efforts to accept or reject
                  a purchase order, and will notify Distributor within three (3)
                  working days from receipt of order.

         7.3      In no event will August Technology accept purchase orders from
                  any Person other than Distributor. All purchase orders must
                  originate from Distributor.

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         7.4      Cancellation.

                  7.4.1    Distributor may cancel a shipment at no charge up to
                           sixty (60) days prior to shipment.

                  7.4.2    Cancellations within sixty (60) days prior to
                           shipment are treated as follows:

                           7.4.2.1    Cancellation #1: August Technology assumes
                                      "risk" of cancellation. Distributor will
                                      not be responsible for any penalties for
                                      this cancellation.

                           7.4.2.2    Cancellation #2: Distributor assumes
                                      "risk" of the next cancellation (following
                                      Cancellation #1). Distributor will be
                                      responsible for accepting original
                                      shipment schedule and fulfillment of
                                      payment obligations to August Technology.

                                      7.4.2.2.1:     If an alternate buyer is
                                                     found, outside of
                                                     Territory, August
                                                     Technology agrees to
                                                     re-purchase the Product
                                                     from Distributor, at
                                                     original export pricing,
                                                     for resale to alternate
                                                     buyer. Distributor agrees
                                                     to pay for shipping costs
                                                     to alternate buyer if
                                                     required (system must be in
                                                     "as new" condition and not
                                                     used except for
                                                     demonstrations in
                                                     Distributor's clean room).

                           7.4.2.3    Cancellation #3: August Technology assumes
                                      "risk" of the next cancellation (following
                                      cancellation #2). Distributor will not be
                                      responsible for any penalties for this
                                      cancellation.

                           7.4.2.4    Cancellation #4, and after: Distributor
                                      and August Technology will alternate
                                      "risk" of cancellation under same terms as
                                      above repeating the cycle of cancellation
                                      "risk" responsibility.

                  At any time following any cancellation, both Distributor and
                  August Technology agree to make best effort to find an
                  alternate buyer, worldwide.

                  All cancellation notices must been submitted in writing to
                  August Technology within three (3) business days following
                  notification by customer to Distributor.

         7.5      August Technology agrees to use its best efforts to meet
                  scheduled shipment dates. However, August Technology will not
                  be liable for delay in meeting a scheduled shipment date. If
                  Products are in short supply, August Technology will allocate
                  them equitably, at August Technology's discretion, among
                  Distributor and all other resale channels. August Technology
                  will only ship an entire order unless otherwise agreed to in
                  writing by Distributor.

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         7.6      Rescheduling (Later Delivery). All rescheduling change must be
                  made at least fifteen (15) days prior to the original shipment
                  date on the purchase order. In no case will the delay be
                  greater than sixty (60) days from original shipment date.
                  Rescheduling will be allowable one time per purchase order,
                  without cost or liability. Distributor agrees to immediately
                  provide August Technology with a written notice of any
                  rescheduling.

         7.7      Rescheduling (Earlier Delivery). Distributor may request early
                  delivery at any time without cost, and August Technology
                  agrees to use its best efforts to comply with this request.

         7.8      August Technology may refuse to ship, or delay the shipment,
                  of any Products on order, if Distributor becomes delinquent in
                  performance of its obligations or fails to meet other credit
                  or financial requirements established by August Technology. No
                  such cancellation, refusal, or delay will be deemed a
                  termination of this Agreement by August Technology, unless
                  August Technology advises Distributor.

         7.9      All Products will be considered delivered to Distributor
                  Ex-works (in accordance with Incoterms 1990) upon transfer to
                  a common carrier by August Technology at the point of shipment
                  (Edina, Minnesota, USA).

         7.10     In the event of any discrepancy between the provisions of this
                  Agreement and any Purchase Order, the provisions of such
                  Purchase Order shall prevail.

8.       RELATIONSHIP

         8.1      Distributor's relationship to August Technology will be that
                  of an independent contractor engaged in purchasing and
                  licensing Products for resale to Distributor customers.
                  Nothing in this Agreement will be understood to give either
                  party any power to direct or control the day-to-day activities
                  of the other. All financial obligations associated with
                  Distributor's business are the sole responsibility of
                  Distributor. Distributor will be solely responsible for and
                  agrees to indemnify and hold August Technology harmless from
                  any claims, damages or lawsuits arising out of act of gross
                  negligence or willful misconduct of Distributor, its
                  employees, and agents. Distributor, its employees and agents,
                  are not agents or legal representatives of August Technology
                  for any purpose, and have no authority to act for, bind, or
                  commit August Technology. Distributor and August Technology
                  agree that this Agreement does not establish a franchise,
                  joint venture, or partnership.

         8.2      Any commitment made by Distributor to its customers with
                  respect to quality, delivery, modifications, interfacing,
                  capability, suitability of software, or suitability in
                  specific applications, will be Distributor's sole
                  responsibility, unless

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                  prior written approval is obtained from August Technology.
                  Distributor has no authority to modify the Products warranty.

         8.3      Distributor has the right to determine its own resale prices,
                  and no August Technology representative will require that any
                  particular price be charged by Distributor.

         8.4      Distributor agrees that August Technology may market and sell
                  Products, other than those listed in Exhibit-A, without making
                  them available to Distributor.

         8.5      August Technology assigns each Distributor based on their
                  expertise and comprehensive knowledge of the Territory,
                  including regional customs, culture, and specific customer
                  business practices. Distributor agrees that the standard
                  Distributor equipment discount is provided by August
                  Technology in order that August Technology can fully rely on
                  the Distributor for all sales, marketing, training, service,
                  and financial responsibilities (in order to satisfy the agreed
                  upon payment terms in this Agreement).

9.       PRODUCT ACCEPTANCE PROCESS

         9.1      August Technology Site Source Inspection: This August
                  Technology Site Source Inspection takes place at August
                  Technology and is performed by August Technology service
                  engineering. In order to complete this source inspection,
                  August Technology will require approved customer samples be
                  received 2 weeks in advance of the scheduled source inspection
                  (For defect inspection Products, these samples should be
                  representative of the types of devices and defects that the
                  customer intends to find in production environments). This
                  August Technology Site Source Inspection to ensure the system
                  quality and configuration prior to shipment.

         9.2      Product Configuration Acceptance: August Technology will
                  forward a completed August Site Source Inspection document to
                  Distributor. This Product Configuration Acceptance is intended
                  to ensure that Distributor accepts the exact configuration of
                  the system being shipped and that this agrees with the
                  customer's order.

         9.3      Distributor Site Source Inspection: This Distributor Site
                  Source should occur within fifteen (15) days of receipt of
                  equipment in Japan. Distributor will perform a source
                  inspection and complete the "source inspection check list" and
                  return a copy of the completed form to August Technology.
                  Should any Product fail to meet Distributor expectations,
                  August Technology will fully support Distributor in this
                  process and will make best effort to ensure that equipment is
                  accepted by Distributor.

         9.4      Final Acceptance Test at Customer Site: This Final Acceptance
                  Test at Customer Site will completed by Distributor. Should
                  any Product fail to meet Customer

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                  expectations, August Technology will fully support Distributor
                  in this process and will make best effort to ensure that
                  equipment is accepted by Customer.

10.      OBLIGATIONS

         During the term of this Agreement August Technology agrees to perform
         the following:

         10.1     August Technology agrees to offer for sale to Distributor
                  Products required by Distributor to perform its duties as
                  described in this Agreement.

         10.2     August Technology agrees to keep Distributor informed of its
                  progress in the conduct of its marketing, sales, and service
                  activities in the USA, as well as international markets
                  (including new applications discovered, major customers,
                  competitor activities, and other trends). August Technology
                  agrees to identify Distributor as its active, exclusive
                  Distributor in the Territory for Products in appropriate
                  advertising and other promotions.

         10.3     August Technology agrees to provide training for Distributor
                  personnel for Products. Training will be available (at a
                  minimum) as follows:

                  (a)      August Technology will provide factory training at a
                           minimum of one (1) time per year. August Technology
                           will pay for all training material, personnel, local
                           transportation, and meals. All other expenses,
                           including air travel and hotel accommodations, will
                           be paid for by Distributor.

                  (b)      In addition to factory training, August Technology
                           may provide training at Distributor's facility on a
                           mutually agreed upon bases (for example, during a
                           trade show in Distributor's Territory). This
                           additional training is in no way intended to be a
                           substitute for factory training.

         10.4.    August Technology agrees to provide reasonable technical
                  advice to Distributor.

         10.5     August Technology agrees to provide a reasonable amount of
                  technical literature that may be necessary to promote Products
                  (such as brochures, video tapes, technical reports, and other
                  data subject to the confidentiality provisions of this
                  Agreement). All technical material and promotional material
                  will be provided in English.

         10.6     August Technology agrees to actively support the marketing,
                  sales, and service efforts of Products by Distributor, give
                  priority responses to Distributor's requests, and keep
                  Distributor informed of lead times and any related changes to
                  Products.

         During the term of this Agreement Distributor agrees to perform the
         following:

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         10.7     Distributor agrees to use its best efforts in good faith to
                  promote, demonstrate, and sell Products on a face-to-face
                  basis and in an end-user environment within the Territory.
                  Distributor agrees to ensure the highest quality of pre-sale
                  and post-sale support to the customers, and to promote the
                  goodwill, name and interest of August Technology and its
                  Products. Specifically, August Technology expects the
                  Distributor to provide the following basic marketing
                  activities, as necessary, in the Territory - industry trade
                  shows, print advertising, direct mail campaigns, marketing
                  literature and data sheets as required to reach each potential
                  customer. Additionally, August Technology expects the
                  Distributor to provide these materials in the local language
                  if necessary.

         10.8     Distributor agrees to purchase an NSX demonstration system,
                  within five (5) days of this Agreement, to be used to actively
                  promote, demonstrate, and sell Products to the customers. For
                  this demo system, August Technology will offer a 32.5%
                  discount with payment terms of 100% due on shipment (net 30).
                  This demonstration discount is available one-time per year,
                  beginning from the date of first demonstration equipment
                  purchase. Distributor has the right to re-sell the
                  demonstration equipment at any time, provided that it is
                  immediately replaced (physically) with another similar or
                  functionally enhanced unit (replacement of the demonstration
                  equipment will be at the standard Distributor Products
                  discount price if the replacement occurs before the one-time
                  per year special discount period expires).

         10.9     Distributor will ensure that its employees complete
                  appropriate training courses, as necessary, (upon release of
                  new product models and software versions) for each of the
                  following subjects: - a) Maintenance training will take place
                  at August Technology's facility in the US. b) Applications
                  training may take place either in Japan or at August
                  Technology's facility in the US. c) Sales training may take
                  place as various locations. August will make it's best efforts
                  to minimize training costs for distributor by holding training
                  classes in Japan when feasible. August Technology will pay for
                  all training material, personnel, local transportation, and
                  meals. All other expenses, including air travel and hotel
                  accommodations, will be paid for by Distributor.

         10.10    Distributor agrees to promptly handle customer complaints,
                  inquiries and orders, and will provide and support Territory
                  based services such as applications assistance, operation and
                  maintenance training, Factory Source Inspection, final on-site
                  acceptance testing, warranty labor services, post-warranty
                  spares and service support, systems retrofits, up-grade kit
                  installation, and the like. Distributor agrees to stock
                  adequate spare parts for Products to meet the requirements of
                  this Agreement as defined Exhibit-A.

         10.11    Distributor agrees to handle all warranty claims of customers
                  and comply with August Technology policy for in-warranty
                  repairs and post-warranty support of Products.

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                  ** For the 3 existing in-warranty CV systems in the Territory
                  (CX002, CV089, CV095) August Technology agrees to repair or
                  replace any spare parts required during the warranty period.**

         10.12    Distributor agrees to conduct its marketing, sales, and
                  service activities in compliance with local customs,
                  traditions, laws, regulations, and customer expectations at
                  the high quality level consistent with that established by
                  August Technology in the USA. Distributor agrees to clearly
                  identify August Technology as the original source of the
                  Products and as the beneficial owner of all Products rights in
                  all advertising, literature, marketing, or labeling, including
                  the use of August Technology's official trademarks and logo.

         10.13    Distributor agrees to bear all of its operating expenses
                  during the term of this Agreement. Distributor will maintain
                  sufficient net worth and Working capital, and devote
                  sufficient financial resources to allow Distributor to perform
                  its obligation as outlined in this Agreement.

         10.14    If, during the term of this Agreement, Distributor receives
                  any inquiry or order regarding Products from any person or
                  business entity outside the Territory, Distributor agrees to
                  immediately refer the inquiry or order to August Technology.
                  For a case in which Distributor's sales efforts specifically
                  related to a Product Specification made to a specific company
                  and made within the Territory results in sales of Products to
                  the same company or affiliates outside the Territory, August
                  Technology will pay to Distributor a commission in accordance
                  with the rate described in Section 6.5. The payment of such
                  commission shall be made by wire transfer within 30 days after
                  August Technology receives a payment from such transaction.
                  Reference Exhibit-D for a complete description of August
                  Technology's World Wide Service & Support Plan.

         10.15    Distributor agrees to, at its expense, arrange for the
                  translation of any documentation for the use and operation of
                  the Products in the Territory (as required or determined to be
                  necessary by Distributor). Distributor will make every
                  reasonable effort to make any translation accurate so that
                  they completely represent August Technology's English version.

11.      WARRANTY

         11.1     Hardware Products - August Technology warrants that it will
                  repair or replace, at its option, hardware Products which are
                  found to be defective in material or workmanship. August
                  Technology must receive written notification of any defect
                  within fourteen (14) months from date of shipment. All
                  transportation charges associated with hardware Products
                  warranty will be arranged and paid for by August Technology.

         11.2     Software Products - August Technology warrants that it will
                  repair or replace, at its option, software Products which fail
                  in a manner which significantly and

<PAGE>

                  adversely affects operating performance as specified in August
                  Technology's published Products description. August Technology
                  must receive written notification of any failure to conform
                  within fourteen (14) months from date of shipment. August
                  Technology does not warrant that the software Products are
                  free from errors. All transportation charges associated with
                  software Products warranty will be arranged and paid for by
                  August Technology.

         11.3     The foregoing warranties will not apply to any deficiency or
                  defect resulting from:

                  (a)      Normal wear and tear, or items subject to
                           deterioration, breakage, or burnout through use.

                  (b)      Installation or maintenance by customer or any third
                           party (other than Distributor).

                  (c)      Modifications or alterations made by customer or any
                           third party without August Technology's written
                           consent.

                  (d)      Misuse or abuse.

                  (e)      Failure of customer to maintain the equipment, site,
                           and environmental conditions as required for the
                           normal operation of the Products.

                  (f)      Causes beyond August Technology's reasonable control.

                  August Technology makes no other warranty, either expressed or
                  implied, including, but not limited to, any implied warranty
                  of merchantability or fitness for a particular purpose, or
                  arising from course of dealing or usage of trade. The
                  foregoing constitutes August Technology's sole obligation and
                  the exclusive remedies of the customer for any breach by
                  August Technology of the warranties contained in this
                  Agreement. August Technology's total liability under this
                  Section 11 will be limited to the repair or replacement of
                  Products, and will in no case exceed the value of the purchase
                  order.

12.      POST-WARRANTY SPARE PARTS SUPPORT

         Due to the rapid pace of the technologies included in the Products,
         August Technology agrees to use its best efforts to maintain the
         ability to provide spare parts and documentation for any Products
         shipped to the Territory for as long as technologically and
         economically feasible. If a direct replacement spare part can not be
         maintained to exact specifications, August Technology will make every
         effort to supply an equal or superior substitute spare part. For a
         period of five (5) years following Product purchase, under no
         circumstances will the customer be forced to abandon the use of their
         Product (or accept inferior performance) due to unavailable
         post-warranty service or spare parts.

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13.      WARRANTY PROCEDURES

         Distributor agrees to request approval from August Technology before
         returning any defective Products. Once approval is granted, August
         Technology will provide Distributor with a Return Material
         Authorization (RMA) number to be displayed on the shipping container of
         the defective Products. Once August Technology approves the return of
         any defective Product, Distributor agrees to ship the Products to
         August Technology's factory using an August Technology approved
         shipping method on FOB Edina basis. Specific parts to be returned to
         August Technology will be advised in the RMA. Distributor agree to ship
         back such defective parts to August Technology at F.O.B. Edina, MN
         basis. (Shipment cost for non-commercial Products are to be borne by
         Shipper side.)

         To expedite warranty service, Distributor and August Technology agree
         to make every effort to supply the customer with immediate replacement
         Product (or parts) while the defective Product (or part) is being
         tested and repaired at August Technology's factory. After repair or
         replacement is completed, August Technology will determine if warranty
         applies and will invoice Distributor for Product (or parts) if warranty
         does not apply (see Section 11.3 for list of non-warranty conditions).

14.      LIMITATION OF LIABILITY

         14.1     Except as stated in this Agreement, August Technology will not
                  be liable for any loss or damages claimed to have resulted
                  from the use, operation, or performance of the Products.

         14.2     August Technology will in no way be liable to Distributor for
                  any special, indirect, incidental, or consequential damages,
                  or for any damages from loss of use or profits.

15.      TRADEMARKS

         From time to time, August Technology may designate one or more August
         Technology trademarks or trade names as available for Distributor's
         use, and will provide standards for that use in August Technology
         material. August Technology authorizes Distributor to use these
         designated trademarks only as follows:

         (a)      Distributor agrees to use the designated trademarks and trade
                  names in accordance with August Technology's standards solely
                  in advertising and promoting Products, in good taste, and in a
                  manner that preserves their value and August Technology's
                  rights in them.

         (b)      Distributor agrees not to use any August Technology trademark
                  or trade name on its letterhead or in a way that implies
                  Distributor is an agency or branch of August Technology.
                  Distributor will immediately change or discontinue any
                  trademark or trade name use when requested in writing by
                  August Technology.

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16.      PROPRIETARY RIGHTS INDEMNITY

         16.1     August Technology will, except as otherwise provided below,
                  defend or settle any claim made, or suit, or proceeding
                  brought against Distributor so far as it is based on a claim
                  that the use or sale of Products sold under this Agreement
                  infringes an intellectual property right, including but not
                  limited to, patent, copyright and trademark. August Technology
                  must be immediately notified in writing and given information,
                  assistance, and sole authority to defend or settle claims, at
                  August Technology's expense. Also, August Technology will pay
                  all damages and costs including reasonable attorneys' fees.
                  finally awarded against Distributor. If any such Product is
                  determined to infringe, and its use is enjoined, or in case of
                  a settlement, August Technology will have the option, at
                  August Technology's expense, to replace Products with a
                  non-infringing Product, or modify Products so it becomes
                  non-infringing, or repurchase Products from Distributor at the
                  original purchase price. August Technology will have no
                  liability to Distributor for any infringement, or claim
                  thereof, based upon use of any Products in combination with
                  any equipment, device, software, or data not supplied by
                  August Technology, if such infringement is caused by such
                  combination.

         16.2     This Section states August Technology's entire liability for
                  proprietary rights infringement by Products furnished under
                  this Agreement.

17.      TERMINATION

         17.1     Either Distributor or August Technology may terminate this
                  Agreement, to be effective upon receipt of written notice,
                  based on the occurrence of any of the following events:

                  (a)      If the other party commits a breach of any obligation
                           in this Agreement.

                  (b)      The commencement by either party of a voluntary
                           action under the federal bankruptcy laws, or any
                           other applicable federal, state, or foreign
                           bankruptcy, insolvency, or other similar laws.

                  (c)      The consent of either party to the appointment of a
                           receiver, assignee, or trustee (or other similar
                           official).

                  (d)      The admission by either party of its inability to pay
                           its debts as they become due.

                  (e)      If Distributor is acquired, or its ownership changes
                           substantially.

                  (f)      The nationalization of either party's assets or
                           business.

<PAGE>

                  (g)      The passage of any legislation by a country, or
                           subdivision of a country, granting Distributor extra
                           contractual compensation upon termination or
                           non-renewal of this Agreement.

                  (h)      By mutual consent at any time and with a written
                           notice of termination signed by both parties.

         17.2     Each party acknowledges that the other has made no commitments
                  regarding the term or renewal of this Agreement. Neither
                  August Technology or Distributor will be liable to the other
                  for damages of any kind, including incidental or consequential
                  damages, or for any losses or claims whatsoever on account of
                  or arising out of the termination of this Agreement.
                  Distributor waives any and all benefit of any law or
                  regulation providing compensation arising from the termination
                  or non-renewal of this Agreement.

         17.3     Upon termination of this Agreement for any reason, Distributor
                  agrees to immediately cease to be an authorized August
                  Technology Distributor and will immediately stop representing
                  itself as an August Technology Distributor, and from using any
                  August Technology trademark or trade name. Distributor also
                  agrees to return any and all sales and marketing material (and
                  equipment) at the written request of August Technology,
                  shipment pre-paid.

         17.4     Upon termination of this Agreement for any reason, Distributor
                  agrees to continue to provide service support to only Products
                  that are under warranty period in the Territory in return for
                  the compensation already received by Distributor for this
                  service (compensation in the form of discounted Products
                  pricing).

         17.5     Outstanding Service Liability: Distributor will be compensated
                  for outstanding service liability on installed base of "in
                  warranty" CV systems in Japan according to the following
                  schedule:

OUTSTANDING SERVICE LIABILITY SCHEDULE:

<TABLE>
<CAPTION>
                                                                        MONTHS                    TOTAL      1YR
                                                           WARRANTY    REMAINING                 SERVICE     PRORATED
  REF    SYSTEM           LOCATION             SHIP         EXPIRE        ON                    COMMISSION   OUTSTANDING
   #     DESCRIPTION      INSTALLED  SERIAL #  DATE          DATE      WARRANTY    LIST PRICE     (5.8%)     LIABILITY
<S>      <C>              <C>        <C>       <C>        <C>          <C>         <C>          <C>          <C>
   1     Dainichi         Japan      CX002     11/20/98   1/31/00          8        $119,500     $6,931         $4,621
   2     Mitsubishi Mat   Japan      CV089     7/22/98    8/22/99          3         $97,250     $5,641         $1,410
   3     Epson Seiko      Japan      CV095     4/30/99    5/30/00         12        $107,097     $6,212         $6,212

TOTAL OUTSTANDING SERVICE LIABILITY PAYABLE TO MARUBENI:                                                       $12,242
</TABLE>

Note: The amount of $12,242 will be credit against the first customer based NSX
system (not the demo system)

<PAGE>

18.      POST TERMINATION COOPERATION

         Both Distributor and August Technology agree to fully cooperate to
         carry out an orderly transition in the marketing, sales, and service of
         Products in the Territory. Upon receiving a written notice of
         termination, as described in Sections 3 or 17, by either party, until
         the effective date of the termination, both parties agree to fully
         cooperate in supporting existing customers in the Territory (see
         Section 17.4 for further agreement on service support following
         termination).

         18.1     Demonstration equipment buy back :If August Technology
                  terminates this Agreement pursuant to the provisions hereof
                  August Technology shall buy back Distributor's demo equipment.
                  Buy-back price will be the distributor's original discounted
                  purchase price if the equipment was shipped within 12 months
                  of the date of termination. For equipment shipped outside of
                  12 months from the date of termination, the buy-back price
                  will be negotiated on a depreciated price.

         18.2     August Technology shall not be obligated to buy back
                  demonstration equipment if Distributor terminates this
                  Agreement pursuant to the provision hereof.

         18.3     Compensation: In accordance with Section 6.5 of this
                  Agreement, Distributor will be compensated at a rate of 1/3 of
                  the purchasing discount from the August Technology published
                  list price as compensation for providing the original "Project
                  Specification". This offer would extend for a period of six
                  (6) months from date of Termination and would only be
                  applicable to accounts that Distributor identifies at the time
                  of Termination and agreed to by August Technology.

         18.4     Spare Parts Inventories buyback: If August Technology
                  terminates this Agreement pursuant to the provisions hereof,
                  August Technology shall buyback Distributor's spare parts
                  inventories. Buy-back price will be the distributor's original
                  discounted purchase price if the spare parts were shipped
                  within 12 months of the date of termination. For spare parts
                  shipped outside of 12 months from the date of termination, the
                  buy-back price will be negotiated on a depreciated price.

         18.5     August Technology shall not be obligated to buy back spare
                  parts if Distributor terminates this Agreement pursuant to the
                  provision hereof.

19.      CONFIDENTIALITY & PROPRIETARY RIGHTS

         19.1     Distributor recognizes that certain information to be provided
                  by August Technology (during the term of this Agreement)
                  including, designs, specifications, drawings, engineering
                  details, software, and information concerning August
                  Technology's customers, business, procedures, methods, and
                  Products, are proprietary to August Technology. Distributor
                  agrees not to attempt to reverse compile or engineer the
                  Products or software associated with them.

<PAGE>

         19.2     Distributor agrees to keep confidential, and to utilize its
                  best efforts to prevent and protect from unauthorized use or
                  disclosure, any information provided to Distributor by August
                  Technology during the term of this Agreement (which is
                  designated by August Technology as confidential or
                  proprietary).

         19.3     Distributor agrees that unauthorized disclosure or use of any
                  proprietary information is a material breach of this
                  Agreement.

         19.4     Distributor agrees not to make, or have made, additional
                  copies of documents containing confidential or proprietary
                  information unless they are necessary for Distributor to
                  perform its obligations of this Agreement. Distributor agrees
                  to include on any copies of confidential or proprietary
                  information a "Confidential Notice" the same manner as the
                  original August Technology documents.

         19.5     Upon termination of this Agreement, Distributor will return to
                  August Technology, or will destroy and certify in writing to
                  August Technology that it has destroyed, all copies of
                  documentation and other forms of confidential or proprietary
                  information.

         19.6     Distributor's obligations under this Section will continue
                  within 3 years following termination of this Agreement.

20.      DISTRIBUTOR'S REPRESENTATIONS

         Distributor represents and warrants that in performing under this
         Agreement it will in no way compromise any rights or trust
         relationships between any other party and itself, or create a conflict
         of interest for Distributor or August Technology. Distributor agrees to
         conduct business in a manner that will enhance the image and reputation
         of August Technology and the Products. Distributor hereby represents
         and warrants that it will comply with all applicable laws and
         regulations, and avoid deceptive, misleading, unethical, and illegal
         practices.

         Distributor acknowledges that it may be necessary for August Technology
         to disclose the fact of Distributor's appointment, the duties performed
         by Distributor, and the compensation paid, should there be a proper
         inquiry from an authorized U.S. government agency.

21.      FORCE MAJEURE

         Neither party will be liable, or deemed to be in breach of this
         Agreement, by reason of any act, delay or omission caused by strikes,
         lockouts, or other labor disputes, regulations, ordinances, or order of
         a court of competent jurisdiction, act of government, act of God, war,
         riot, epidemic, flood, earthquake or like natural disaster, embargo or
         quarantine, or any other cause beyond the reasonable control of the
         party claiming force majeure. The party whose performance will have
         been prevented or delayed must

<PAGE>

         provide immediate written notice to the other party explaining the
         nature of the act, delay or omission, and the date such condition
         commenced. The party also agrees to provide further written notice
         when the condition has ended.

22.      MODIFICATIONS & IMPROVEMENTS OF PRODUCTS

         If any modifications or improvements to the Products are developed by
         Distributor or August Technology, such modifications or improvements
         will be the exclusive property of August Technology, which will have
         the full right to patent or copyright such modifications or
         improvements at its sole cost and expense.

23.      GOVERNMENT EXPORT RESTRICTIONS

         Distributor agrees that the Products purchased will not be exported
         directly or indirectly, separately or as part of a system, without
         complete and full compliance with the export and re-export restrictions
         imposed by U.S. export laws and regulations. Distributor also agrees to
         take reasonable action to assure that no customer contravenes the U.S.
         laws and regulations.

24.      NOTICES

         Unless otherwise agreed to by both parties, all notices required under
         this Agreement will be made by fax, and all notices will be addressed
         to the attention of the party executing the Agreement, or his or her
         successor.

25.      GENERAL PROVISIONS

         25.1     Neither party may assign or transfer this Agreement. Any
                  attempted assignment or transfer will be void. Both parties
                  agree to advise each other of any change in ownership,
                  control, or operating arrangements.

         25.2     Either party's failure to enforce any provisions of this
                  Agreement will not be deemed a waiver of that provision or of
                  the right to enforce it in the future.

         25.3     This Agreement, including the attached Exhibits, contains the
                  entire and only understanding between the parties, and
                  supersedes all prior agreements either written or oral
                  relating to the subject matter of this Agreement. No
                  modifications of this Agreement will be binding on either
                  party, unless made in writing and signed by persons authorized
                  to sign agreements on behalf of Distributor and August
                  Technology.

         25.4     If any provision of this Agreement will be determined by any
                  court of competent jurisdiction to be illegal, invalid, or
                  unenforceable, that provision will be understood and enforced
                  as if it had been more narrowly drawn so as not to be illegal,
                  invalid or unenforceable. Any determination will have no
                  effect upon the enforceability of any other provision of this
                  Agreement.

<PAGE>

         25.5     If during the term of this Agreement, or at any time after its
                  termination, either August Technology or Distributor commences
                  a suit, action, or other legal proceedings against the other
                  arising out of or in connection with this Agreement, such
                  action will be brought in the state or federal courts located
                  in the State of Minnesota, USA.

         25.6     This Agreement will be governed by the laws of the State of
                  Minnesota, USA and specifically excludes the United States
                  Convention on Contracts of International Sales of Goods. Any
                  disputes or claims arising out of this Agreement or its
                  interpretation, creation, termination, or performance will be
                  settled by binding arbitration in Minnesota, under the Rules
                  of Arbitration of the International Chamber of Commerce.

         25.7     This Agreement will be effective only upon its execution by
                  August Technology at its Corporate Headquarters. This
                  Agreement will be binding upon, and will inure the benefit of
                  the parties, and their respective heirs, executors,
                  representatives, and successors in interest.

         25.8     The prevailing party in any arbitration, or other legal action
                  brought by one party against the other arising out of this
                  Agreement, will be entitled, in addition to any other rights
                  and remedies it may have, to reimbursement for its expenses,
                  including court costs and attorneys' fees.

26.      AUTHORITY

         If Distributor is a partner or corporation, the person executing this
         Agreement represents that he or she is either a general partner or a
         duly authorized corporate officer, and that he or she has full
         authority to enter into this Agreement on behalf of Distributor.

DISTRIBUTOR:                                   ACCEPTED BY:

Marubeni Solutions Corporation                 August Technology Corporation

----------------------------------             ---------------------------------
Authorized Signature                           Authorized Signature

Title:  President                              Title: President & CEO<PAGE>

                                                                   Exhibit 10.3

                          AUGUST TECHNOLOGY CORPORATION

                            INTERNATIONAL DISTRIBUTOR
                                    AGREEMENT

This, Agreement is made as of the 10th day of September, 1999, between AUGUST
TECHNOLOGY CORPORATION, a Minnesota (USA) corporation with a principal place of
business at 5237 Edina Industrial Blvd., Edina, Minnesota 55439, USA, (hereafter
referred to as "August Technology") and Metron Technology B.V., an entity
organized and existing under the laws of The Netherlands, having its principal
place of business at Almere, The Netherlands, (hereafter referred to as
"Distributor").
                                    AGREEMENT

In consideration of the mutual covenants and agreements hereinafter set forth,
the parties agree as follows:

1.       DEFINITIONS:

         The terms listed below will have the following meaning, unless the
         context clearly indicates otherwise:

         1.1      "AGREEMENT" means this International Distributor Agreement and
         all Exhibits.

         1.2      "PRODUCTS" means image inspection technology, vision system
         controlled manufacturing tools, licensed software programs and related
         spare parts manufactured and supplied by August Technology and
         specified in Exhibit A.

         1.3      "COMPETITIVE PRODUCTS" will mean image inspection technology,
         vision system controlled manufacturing tools, licensed software
         programs, and related spare parts, providing substantially the same
         functionality as the Products.

         1.4      "PRICE LIST" will mean the published prices that August
         Technology shall issue from time to time.

         1.5      "Territory" will mean the countries specified in Exhibit D.

2.       APPOINTMENT AND TERRITORY:

         August Technology hereby appoints Distributor as its exclusive
         authorized Distributor for the purpose of selling and servicing the
         Products to customers in the Territory only (except to those customers
         listed in .Exhibit C, which are considered exclusive August
         Technology-accounts). Distributor agrees that it will resell Products
         to end-user of the

                                                                          PAGE 1

<PAGE>

         Products only and not to resellers through its staff of employees and
         not through or by means of third-party dealers, sub-agents or
         representatives. Distributor agrees not to establish a branch office or
         other entity or association for the purpose of selling or distributing
         Products outside the Territory.

3.       PRICE, PAYMENT, TAXES, DUTY & DISCOUNT:

         3.1      Prices for the Products purchased under this Agreement,
         including discounts, are subject to change upon thirty (30) days'
         notice, are quoted in U.S. Dollars and are exclusive of taxes, duties,
         freight insurance, or other similar handling costs. All applicable
         duties, sales, use or excise taxes or other charges assessed or levied
         will be added to the purchase price and itemized and/or invoiced
         separately. Price changes will not apply to unfilled purchase orders
         that have been accepted by August Technology prior to the effective
         date of the price change. All prices are F.C.A./F.O.B. point of origin
         or manufacture.

         3.2      The Distributor shall pay for all Products by wire transfer to
         the account of August Technology as specified on Exhibit B or at such
         other bank as may be directed from time to time by August Technology.
         Payment terms for each order are also specified on Exhibit B. If any
         amount remains unpaid after the due date, the outstanding amount will
         incur interest at the rate of one and one-half percent (1.5%) per month
         or at the highest rate allowed by law, which ever is higher. In
         addition, if any amount is not paid when due, August Technology may
         suspend further shipments to the Distributor until all outstanding
         amounts are paid in full and thereafter may require the Distributor to
         open an irrevocable letter of credit for each order in favor of August
         Technology at a bank acceptable to August Technology payable thirty
         (30) days after sight.

         3.3      Both Distributor and August Technology agree that a customer
         order has three primary components: (1) project/equipment
         specification, (2) purchasing/negotiations, and (3) training,
         installation, and follow-on service support. The-Distributor's
         purchasing discount from the August Technology published list price
         will be effected by these primary components (see Table-1).

         TABLE-1:            Equipment Discount Schedule

<TABLE>
<CAPTION>

         ---------------------------------------------------------------------------------------
                               LOCATION                           LOCATION
                                WHERE           LOCATION           WHERE         %OF STANDARD
              ORDER             PROJECT           WHERE            EQUIP.           EQUIP.
           POSSIBILITY         SPECIFIED       P.O. ISSUED        INSTALLED        DISCOUNT
         ---------------------------------------------------------------------------------------
<S>                            <C>              <C>               <C>                  <C>
                1              Territory        Territory         Territory            100%
         ---------------------------------------------------------------------------------------
                2              Territory        Territory          Not in              66 1/3%
                                                                  Territory
         ---------------------------------------------------------------------------------------
                3              Not in           Territory         Territory            66 1/3%
         ---------------------------------------------------------------------------------------
                4              Territory         Not in
                                                Territory         Territory            66 1/3%
         ---------------------------------------------------------------------------------------
                5              Territory         Not in            Not in              33 1/3%
                                                Territory         Territory
         ---------------------------------------------------------------------------------------
                6               Not in          Territory          Not in              33 1/3
                               Territory                          Territory
         ---------------------------------------------------------------------------------------

                                                                          PAGE 2

<PAGE>

<CAPTION>

         ---------------------------------------------------------------------------------------
                               LOCATION                           LOCATION
                                WHERE           LOCATION           WHERE         %OF STANDARD
              ORDER             PROJECT           WHERE            EQUIP.           EQUIP.
           POSSIBILITY         SPECIFIED       P.O. ISSUED        INSTALLED        DISCOUNT
         ---------------------------------------------------------------------------------------
<S>                            <C>              <C>               <C>                  <C>
                7               Not in           Not in           Territory            33 1/3%
                               Territory        Territory
         ---------------------------------------------------------------------------------------
                8               Not in           Not in            Not in                   0%
                               Territory        Territory         Territory
         ---------------------------------------------------------------------------------------
</TABLE>

4.       TITLE, SECURITY AGREEMENT, RISK OF LOSS:

         4.1      Title and ownership of the Products shall remain in August
         Technology until payment is made in full including any additional
         charges provided for herein.

         4.2      August Technology reserves a purchase money security interest
         in the Products sold hereunder as security for performance of the
         Distributor's obligations set forth herein. A copy of this
         International Distributor Agreement in addition to a specific purchase
         order or orders may be filed as evidence thereof. In addition, and as
         may be allowed by local law, the Distributor will record any
         reservation of title or liens in favor of August Technology in such a
         format and at all places directed by August Technology including,
         without Stations on all purchase orders or invoices issued to customers
         of the Distributor prior to delivery of Products to the customer if
         payment or any portion thereof remains outstanding at the time of
         delivery to customer.

         4.3      Risk of loss shall pass to the Distributor or the
         Distributor's customer upon transfer of the Products to the
         Distributor's or customer's common or specified carrier. The
         Distributor expressly agrees to keep in force fire, theft, and accident
         insurance for the benefit of both parties as their interests appear on
         the date of shipment. Freight, insurance, export arrangements and other
         similar costs and duties shall be solely the responsibility of the
         Distributor or the Distributor's customer; August Technology takes no
         responsibility therefor.

5.       PURCHASE ORDERS, SHIPMENTS, CANCELLATIONS & CHANGES, DELIVERY:

         5.1      The Distributor agrees to deliver to August Technology a hard
         copy purchase order, in substantially the form attached hereto as
         Exhibit E, before August Technology will accept an order. August
         Technology reserves the right to amend the contents of Exhibit E from
         time to time, as the need for different or additional information
         required to process a purchase order is deemed to be necessary.
         Distributor purchase orders are subject to acceptance at August
         Technology.

         August Technology reserves the right to reject any order which does not
         comply with the provisions of this Agreement and conform to Exhibit E.
         AR orders accepted for delivery will be governed exclusively by the
         terms and conditions of this Agreement and its incorporated Exhibits.
         Unless August Technology expressly agrees in writing, no additional or
         different terms and conditions appearing on the face or reverse side of
         any order issued by Distributor will become part of such order.
         Acknowledgment of a

                                                                          PAGE 3

<PAGE>

         Distributor purchase order by August Technology will not constitute
         acceptance of any additional or different terms and conditions.

         5.2      No purchase order will be binding on August Technology until
         accepted by August Technology in writing. August Technology agrees to
         use its best efforts to accept or reject a purchase order, and notify
         Distributor within three (3) working days from receipt of order.

         5.3      Distributor may cancel a shipment or request a change in a
         scheduled shipment date at no charge up to ninety (90) days prior to
         shipment. In the event Distributor cancels or requests a schedule
         change within ninety (90) days prior to shipment a portion of the
         purchase order amount (price) will be charged as provided below. No
         cancellation or changes in a scheduled shipment may be made within
         fifteen (15) days of shipment.

                  5.3.1    RESCHEDULING.  (LATER DELIVERY).

                  Distributor may reschedule shipment of Products for up to
                  sixty (60) days upon written notice, on a one-time basis per
                  purchase order, without cost or liability. Distributor agrees
                  to immediately provide August Technology with a written notice
                  of any rescheduling.

                  5.3.2    CANCELLATION.

                  Distributor may cancel any purchase order in advance of
                  shipment upon written notice to August Technology, subject to
                  the following:

                           (i)      No cancellation is possible within fifteen
                                    (15) days of the shipment date on the
                                    purchase order.

                           (ii)     If cancellation occurs during the LAST 1/3
                                    of the quoted delivery schedule, the charge
                                    will be 25% of the total purchase order
                                    amount - except as provided in "(i)," which
                                    states that no cancellation is possible
                                    within fifteen (15) days of the shipment
                                    date.

                           (iii)    If cancellation occurs during the MIDDLE 1/3
                                    of the quoted delivery schedule, the charge
                                    will be 17.5% of the total purchase order
                                    amount.

                           (iv)     If cancellation occurs during the FIRST 1/3
                                    of the quoted delivery schedule, the charge
                                    will be 10% of the total purchase order
                                    amount.

                                [GRAPHIC OMITTED]

         5.4      August Technology reserves the right to delete a Product from
         Exhibit A if August Technology ceases manufacturing the Product or in
         the event the Product or technology is sold or otherwise transferred to
         a third-party.

                                                                          PAGE 4

<PAGE>

         5.5      August Technology may refuse to ship, or delay the shipment of
         any Products on order, if Distributor becomes delinquent in performance
         of its obligations or fails to meet other credit or special
         requirements established by August Technology. No such cancellation,
         refusal or delay will be deemed a termination of this Agreement by
         August Technology, unless August Technology advises Distributor.

         5.6      All Products will be considered delivered to distributor
         F.C.A./F.O.B. point of origin or MANUFACTURE upon transfer to
         Distributor's or customer's common or specified carrier.

6.       INDEPENDENT CONTRACTOR:

         6.1      The Distributor agrees that it has been granted the right to
         distribute and market the Products for resale to Distributor's
         customers and to conduct its business as an independent agent with
         respect to August Technology. The Distributor agrees that it will at
         all times, represent to third persons and to the public generally and
         to all governmental bodies and authorities that the business conducted
         by Distributor with respect to August Technology is that of an
         independent agent and that is the sole relationship and exclusive
         relationship between the Distributor and August Technology. It is
         expressly understood that the Distributor is not in any way constituted
         the legal representative of August Technology for any purpose
         whatsoever with respect to the Products. It is further expressly
         understood that the sole compensation to be received by the Distributor
         shall be derived from sales of the Products. The Distributor has no
         claim or right against August Technology for compensation for efforts
         to market August Technology's Products except as herein provided.

         It is further understood that the Distributor may have its employees
         and agents in the Territory engage in the solicitation of orders for
         selling and/or servicing of August Technology's Products, and in that
         event those persons shall be employees or agents of the Distributor and
         not of August Technology. All financial obligations associated with
         Distributor's business are the sole responsibility of Distributor. The
         Distributor shall hold August Technology harmless from all losses,
         damages, costs, and expenses of any nature, including attorneys' fees,
         arising from or in any way connected with an act failure to act, or
         negligence of the Distributor or its employees or agents, or others
         acting with authority from the Distributor in the sale, transportation,
         possession, or use of the Products. Distributor and August Technology
         agree that this Agreement does not establish a franchise, joint
         venture, or partnership.

         6.2      Any commitment made by Distributor to its customers with
         respect to quality, delivery, modifications, interfacing, capability,
         suitability of software, or suitability in specific applications, will
         be Distributor's sole responsibility, unless prior written approval is
         obtained from August Technology. Distributor has no authority to modify
         the Product Warranties.

         6.3      Distributor has the right to determine its own resale prices,
         and no August Technology representative will require that any
         particular price be charged by Distributor.

                                                                          PAGE 5

<PAGE>

         6.4      Distributor agrees that August Technology may market and sell
         Products, other than those listed in Exhibit A, without making them
         available to Distributor.

         6.5      August Technology assigns each distributor based on their
         respective expertise and comprehensive knowledge of the Territory,
         including regional customs, culture, and specific customer business
         practices. Distributor agrees that the standard distributor equipment
         discount is provided by August Technology in order that August
         Technology can fully rely on the Distributor for all sales, marketing,
         training, service, and financial responsibilities (in order to satisfy
         the agreed upon payment terms m this Agreement).

7.       PRODUCT ACCEPTANCE:

         Distributor agrees to inspect all Products immediately upon receipt at
         their facility, and may reject any Products that fail to meet the
         August Technology published specifications. Any Products not rejected'
         within fifteen (15) days after receipt by Distributor will be
         considered accepted. Distributor agrees to provide a detailed written
         notification to August Technology of any and all reasons for rejection
         within the fifteen (I 5) day inspection period. Upon receipt of
         rejection notification, August Technology will promptly determine an
         appropriate course of action to be taken regarding the rejected
         Products. All returns of rejected Products to August Technology will
         require prior written approval by August Technology.

8.       OBLIGATIONS OF AUGUST TECHNOLOGY:

         During the term of this Agreement August Technology agrees to perform
         the following:

         8.1      August Technology will furnish to Distributor circulars,
         catalogs, advertising literature, samples, information on new product
         releases, current technical data and all other sales materials
         pertinent to the sale and distribution of the Products in the Territory
         in the English language only and will otherwise assist the Distributor
         in the sale of its Products as requested by the Distributor. In
         addition, August Technology will identify Distributor as its exclusive
         distributor in the Territory for Products in appropriate advertising
         and other promotions.

         8.2      August Technology agrees to provide training for Distributor
         personnel for Products. Training will be available (at a minimum) as
         follows:

                  8.2.1    August Technology will provide factory training at a
                           minimum of one (1) time per year. August Technology
                           will pay for all training material and class room
                           time. All other expenses, including air travel and
                           hotel accommodations, will be paid for by
                           Distributor.

                  8.2.2    In addition to factory training, August Technology
                           may provide at Distributor's facility on a mutually
                           agreed upon bases (for example, during a trade show
                           in Distributor's Territory). This additional training
                           is in no way intended to be a substitute for factory
                           training.

                                                                          PAGE 6

<PAGE>

         8.3      August Technology agrees to actively support the marketing,
         sales, and service efforts of Products by Distributor, give priority
         responses to Distributor's requests, and keep Distributor informed of
         lead times and any related changes to Products.

9.       OBLIGATIONS OF DISTRIBUTOR:

         During the term of this Agreement Distributor agrees to perform the
         following:

         9.1      Distributor agrees to use its best efforts in good faith to
         promote, demonstrate, and sell Products on a face-to-face basis and in
         an end-user environment within the Territory. Distributor agrees to
         ensure the highest quality of pre-sale and post-sale support to the
         customers, and to promote the goodwill, name and interests of August
         Technology and its Products. August Technology expects the Distributor
         to provide the following basic marketing activities in the Territory -
         [a] industry trade shows, [b] print advertising, [c] direct mail
         campaigns, [d] marketing literature and data sheets in local language
         (if necessary). In connection with the foregoing, the Distributor also
         agrees to do the following:

                  9.1.1    Provide each customer at the time of order acceptance
                           a written copy of the August Technology statement of
                           warranty ("August Technology Statement of Warranty")
                           attached hereto as Exhibit F.

                  9.1.2    Solicit potential and existing customers on a regular
                           basis and deliver to August Technology, not later
                           than the end of each month, a written report of all
                           activities of the, Distributor with respect to key
                           customers during that month.

                  9.1.3    Keep August Technology continuously informed of the
                           progress of the Distributor's marketing efforts, and
                           the efforts of all of the Distributor's sales
                           representatives.

                  9.1.4    Deliver to August Technology, not later than June 30
                           each year, a forecast of potential sales of Products
                           in the Territory for the next twelve month period,
                           including the names of customers, type and quantity
                           of Products likely to be purchased. In addition, not
                           later than the end of each calendar quarter,
                           Distributor agrees to provide updates of the
                           foregoing to August Technology in a similar format to
                           roll the forecast forward, with actual sales against
                           the forecasted sales, and projecting sales out
                           continuously for each twelve month period.

         9.2      Distributor agrees to purchase demonstration Products, within
         thirty (30) days of this Agreement, to be used to actively promote,
         demonstrate, and sell Products to the customers. A demonstration unit
         may be purchased for each Product at a special discount of 32.5% off
         published list pricing. This demonstration discount is available
         one-time per year, beginning from the date of first demonstration
         equipment purchase. Distributor has the right to re-sell the
         demonstration equipment at any time, provided that it is immediately
         replaced (physically) with another similar or functionally enhanced
         unit (replacement of the demonstration equipment will be at the
         standard Distributor Products

                                                                          PAGE 7

<PAGE>

         discount price if the replacement occurs before the one-time per year
         special discount period expires). At the end of this agreement,
         Distributor has the right to return the demonstration unit to August
         Technology for the value that was paid for it originally, provided that
         effort has been made to first sell the demonstration unit in the
         Region.

         9.3      Distributor agrees to maintain adequate facilities and to
         actively train and maintain an adequate number of employees to properly
         promote, demonstrate, sell, and service the Products. Distributor will
         ensure that its employees complete appropriate training courses (at a
         minimum of one time per year at August Technology's facility). August
         Technology will pay for all training material and class room time. All
         other expenses, including air travel and hotel accommodations, will be
         paid for by Distributor.

         9.4      Distributor agrees to promptly handle customer complaints,
         inquiries and orders, and will provide and support Territory based
         services such as applications assistance, operation and maintenance
         training, Factory Acceptance Testing (F.A.T. - held at August
         Technology), final on-site acceptance testing, warranty labor services,
         post-warranty spares and service support systems retrofits, up-grade
         kit installation, and the like. Distributor agrees to stock adequate
         spare parts for Products to meet the requirements of this Agreement as
         defined in Exhibit A.

         9.5      Distributor agrees to handle all warranty claims of customers
         and comply with August Technology policy for in-warranty repairs and
         post-warranty support of Products.

         9.6      Distributor agrees to conduct its marketing, sales and service
         activities in compliance with local laws, rules and regulations. Both
         August Technology and the Distributor acknowledge each and every
         authorized representative or distributor of August Technology Products
         is an integral part of a worldwide network and that not -only August
         Technology but all other representatives and distributors of August
         Technology are relying upon the Distributor to perform in accordance
         with this Agreement. For this reason, the Distributor will maintain the
         highest standards of performance in sales, service, physical
         facilities, financial responsibility and general conduct toward the
         public.

         9.7      Distributor agrees to bear all of its operating expenses
         during the term of this Agreement. Distributor will maintain sufficient
         net worth and working capital and devote sufficient financial resources
         to allow Distributor to perform its obligation as outlined in this
         Agreement.

         9.8      If, during the term of this Agreement, Distributor receives
         any inquiry or order regarding Products from any person or business
         entity outside the Territory, Distributor agrees to immediately refer
         the inquiry or order to August Technology, and agrees not to receive
         compensation for this referral.

         9.9      Distributor agrees to, at its expense, arrange for the
         violation of any documentation for the use and operation of the
         Products in the Territory (as required or determined to be necessary by
         Distributor). Distributor shall use its best efforts to make any
         translation accurate.

                                                                          PAGE 8

<PAGE>

         9.10     Distributor agrees to establish a cleanroom at it's facility
         in Taiwan for the purposes of displaying, operating and using the
         demonstration unit and to provide August Technology's Field
         Applications Engineer an office space and phone at this same facility.

10.      INTELLECTUAL PROPERTY:

         10.1     Products shall bear only the trademarks, trade names, other
         marks, or intellectual property rights of August Technology
         (hereinafter referred to as the "Trademarks") as designated by August
         Technology from time to time. To the extent applicable, August
         Technology may grant to the Distributor during the term of Trademarks,
         however, will be strictly to the marketing and sale solely of the
         Products as specifically set forth in this Agreement and does not
         include the right to use the Trademarks generally in the name of the
         Distributor's business or for any other products or services offered by
         the Distributor. In addition, the Distributor will execute, separate
         agreements acknowledging this license, including a registered user
         agreement, if appropriate, for filing with appropriate trademark
         offices. The Distributor shall at all times comply with the reasonable
         instructions or requests of August Technology with respect to the
         application, fixation, manner, and styling of the Trademarks, its
         packaging, and all other documents, marketing, or promotional material.

         10.2     The Distributor acknowledges that August Technology has the
         sole right, title, and interest in the Trademarks, and all other rights
         associated with the Products, including, but not limited to, any
         patents, know-how, approvals, certifications of Products (in the
         countries of the Territory), and all other records or information of
         August Technology with respect to the sale, distribution, and servicing
         of the Products, and all catalogs and other printed information of
         August Technology, whether or not prepared by the Distributor (the
         "Property").

         10.3     Upon request by August Technology the Distributor agrees, on
         behalf of August Technology to assist August Technology in securing any
         approvals, certifications, registrations, letters patent or any other
         registrations to protect the Property in the Territory.

         10.4     The Distributor agrees to promptly inform August Technology
         upon the assertion of a claim, institution of a proceeding by a third
         party, or any circumstances giving rise to any claim by August
         Technology against a third party with respect to the Products, August
         Technology, the Trademarks, or the Property. August Technology shall
         have complete control of any litigation or proceeding related to
         alleged or actual pirating, infringement or imitation of Products, the
         Property, or the Trademarks. The Distributor will advise all employees,
         officers, directors, and agents of the Distributor that the Property is
         the property of August Technology.

         10.5     The Distributor represents and warrants that the Distributor
         has not sought or obtained, and agrees not to seek or obtain, in the
         Territory, or elsewhere, unless for the benefit and at the request of
         August Technology any certification, registration, or approval
         embodying the Property, including, but not limited to, patents,
         copyrights, trademarks, trade names, product certifications; and agrees
         further to discontinue all use

                                                                          PAGE 9

<PAGE>

         of the Property or the Trademarks immediately upon termination of this
         Agreement for any reason. Furthermore, in the event the Distributor
         obtains registrations or certifications of Products in the countries of
         the Territory at the request of August Technology, the parties agree
         those registrations and certifications are solely for the benefit of
         August Technology, they may be canceled or referred by August
         Technology at any time, and the Distributor shall execute all documents
         appropriate to accomplish the cancellation or transfer thereof.

         10.6     The Distributor agrees not to use the Property or the
         Trademarks and any goodwill related thereto except solely as approved
         by August Technology, and only in connection with advertising and
         promoting the Products. Any such use, value, or goodwill shall inure
         solely to the benefit of August Technology and shall not give rise to
         any license to the use thereof by or to further compensate the
         Distributor.

         10.7     The Distributor shall communicate promptly to August
         Technology all engineering, applications, ideas, developments,
         improvements or changes, whether patentable or not, conceived or made
         by the Distributor or the Distributor's representatives,
         sub-distributors, or agents, alone or in conjunction with others during
         the term of this Agreement relating to the Products (the "Distributor's
         Suggestions").

         10.8     The Distributor and August Technology shall make every effort
         to agree upon reasonable terms to allow August Technology to acquire
         the rights to the Distributor's Suggestions. The Distributor shall not
         sell grant, or otherwise offer to third parties any title to the
         Distributor's Suggestions. August Technology shall have the sole right
         to acquire the title or license to the Distributor's Suggestions, and
         the Distributor agrees to offer such rights to August Technology on
         request.

         10.9     The parties understand that, except as may be otherwise
         expressly stated herein, neither the terms and conditions of this
         Agreement nor the acts of either party arising out of this Agreement or
         in connection with performance hereunder, may be considered in any way
         as a grant of any license whatsoever under any of August Technology's
         present or future patents, copyrights, trademarks, trade secrets or
         other proprietary rights; nor is any such license granted by
         implication, estoppel or otherwise.

11.      PRODUCT LIABILITY; TECHNICAL INFORMATION; WARRANTY:

         11.1     The Distributor shall have no responsibility for the Products
         manufactured by August Technology to the purchasers of such Products or
         to persons claiming through such purchasers; unless the Distributor has
         assembled and/or serviced such Products and has failed to do so
         pursuant to August Technology's instructions and warranty, or has
         represented or warranted the Products beyond the scope of August
         Technology's written warranty, if any, without the express written
         authority of August Technology. Except as herein provided, any product
         liability which may result from the sale or distribution of August
         Technology's Product shall be the sole responsibility of August
         Technology and not of the Distributor. The Distributor agrees not to
         make any such representations concerning August Technology's Products,
         other than such representations as may be made by August Technology
         from time to time in writing.

                                                                         PAGE 10

<PAGE>

         11.2     IN NO EVENT SHALL AUGUST TECHNOLOGY OR THE DISTRIBUTOR BE
         LIABLE TO ONE ANOTHER FOR GENERAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
         OR FOR LOSS OF ANTICIPATED PROFITS ON ANY CLAIM OF ANY KIND STEMMING
         FROM A PURCHASE ORDER, A PRODUCT, OR FROM PERFORMANCE OR BREACH OF THIS
         AGREEMENT EXCEPT FOR BREACH OF SECTION 11.1.

         11.3     No warranties exist with respect to the Products except
         express warranties explicitly provided in customer quotations, catalogs
         and other materials provided to the Distributor for delivery to
         ultimate customers. August Technology EXPRESSLY DISCLAIMS ANY IMPLIED
         WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND
         ANY OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
         ANY IMPLIED WARRANTY ARISING OUT OF A COURSE OF DEALING OR PERFORMANCE,
         CUSTOMER USAGE OR TRADE USAGE, EXCEPT EXPRESS WRITTEN WARRANTIES, IF
         ANY, PROVIDED TO ULTIMATE CUSTOMERS IN WRITTEN MATERIALS PROVIDED BY
         AUGUST TECHNOLOGY RELATING TO THE PRODUCTS.

         11.4     August Technology warrants that August Technology Products
         sold and delivered to the Distributor hereunder are in accordance with
         August Technology's Statement of Warranty attached hereto as Exhibit F
         (the "August Technology Statement of Warranty").

         11.5     August Technology reserves the right to change technical
         specifications without notice. Some information contained within
         Product catalogs has been obtained from sources other than August
         Technology, but is believed to be reliable. No warranty, express or
         implied, is made or intended as to the accuracy or the completeness
         thereof. August Technology cannot anticipate all applications or
         variations in the use, application or manufacturing methods intended by
         end users of the Products; therefore, August Technology does not assume
         liability for use thereof in association with any technical information
         contained in Product catalogs.

12.      POST-WARRANTY SPARE PARTS SUPPORT:

         August Technology agrees to use its best efforts to maintain the
         ability to provide spare parts and documentation for any Products
         shipped to the Territory for as long as technologically and
         economically feasible. If a direct replacement spare part can not be
         maintained to exact specifications, August Technology will make every
         effort to supply an equal or superior substitute spare part. For a
         period of five (5) years -following Product purchase, under no
         circumstances will the customer be forced to abandon the use of an
         August Technology Product (or accept inferior performance) due to
         unavailable post-warranty service or spare parts.

13.      WARRANTY PROCEDURES:

         13.1     Distributor agrees to request approval from August Technology
         before returning any defective Products. Once approval is granted,
         August Technology will provide

                                                                         PAGE 11

<PAGE>

         Distributor with a Return Material Authorization (RMA) number to be
         displayed on the shipping container of the defective Products. Once
         August Technology approves-the return of any defective Product,
         Distributor agrees to ship the Products to August Technology's factory
         using an August Technology approved shipping method. August Technology
         will attempt to make all necessary repairs or replacements, and will
         ship the Product or a substitute of substantially the same form and
         function back to Distributor or its customer, freight prepaid.

         13.2     All returned Products found to be free of defects will be
         subject to an inspection charge of ten (10) percent of the purchase
         order amount, plus shipping charges. Repairs and replacements due to
         reasons not covered by the warranty will be invoiced at August
         Technology's then current prices and will be payable under the terms of
         this Agreement.

14.      CONFIDENTIALITY:

         The Distributor agrees and shall cause its employees, officers and
         agents: (a) not to communicate, divulge, or use for the benefit of any
         other firm, person, or organization, any of the business secrets or
         methods, business policies, manuals, instructions, reports, and lists
         of names of customers of August Technology; (b) to exercise caution at
         all times in protecting confidential information of August Technology
         pertaining to the Products, its pricing, business, or assets with at
         least the same degree of care as is by the Distributor for the
         protection of its own confidential and proprietary information; and (c)
         not to reveal any other confidential information of August Technology.
         The provisions of this Section 14 shall survive termination of this
         Agreement and the Distributor shall return to August Technology, and
         refrain after the termination of this Agreement from any use of, all
         samples, manuals, product information letters, and similar material
         supplied to it by August Technology, including, but not limited to, all
         documents and copies thereof designated confidential by August
         Technology.

15.      TERM AND TERMINATION:

         15.1     EFFECTIVE DATE. This Agreement shall become effective on the
         date executed (the "Effective Date").

         15.2     TERM - This Agreement shall continue in effect for a period of
         two(2) years from the Effective Date unless terminated sooner in
         accordance with provisions contained herein (the "Initial Term"). This
         Agreement shall continue after the Initial Term, until voluntarily
         terminated by either party upon written notice delivered at least one
         (1) year prior to the end of the Initial Term or ongoing period. Notice
         will be deemed given on the date that the party mails notice as set
         forth in Section 20 below. However, termination in this manner shall
         not release the Distributor from any accrued obligations of this
         Agreement, which will be satisfied promptly. Except as otherwise
         provided, termination, for whatever reason, shall terminate all rights
         of the Distributor set forth herein, including without limitation, the
         right to market or sell the Products or use the Trademarks.

                                                                         PAGE 12

<PAGE>

         15.3     Notwithstanding the provisions of Section 15.2, either
         Distributor or August Technology may terminate this Agreement, to be
         effective upon receipt of written notice, based on the occurrence of
         any of the following events:

                  15.3.1   If the other party commits a breach of any obligation
                           in this. Agreement which is not cured within thirty
                           (30) days after written notice thereof specifying the
                           nature of the breach.

                  15.3.2   The commencement by either party of a voluntary
                           action under the federal bankruptcy laws, or any
                           other applicable federal state, or foreign
                           bankruptcy, insolvency, or other SIMILAR laws.

                  15.3.3   The consent of either party to the appointment of a
                           receiver, assignee, or e (or other similar official).

                  15.3.4   The admission by either party of its inability to pay
                           its debts as they become due.

                  15.3.5   If Distributor is acquired or in the event of a
                           change in control.

                  15.3.6   The nationalization of either party's assets or
                           business.

                  15.3.7   The passage of any legislation by a country, or
                           subdivision of a country, granting Distributor extra
                           contractual compensation upon termination or
                           non-renewal of this Agreement.

                  15.3.8   By mutual consent at any time and with a written
                           notice of termination signed by both parties.

         15.4     Except as provided for herein, each party acknowledges that
         the other has made no commitments regarding the renewal of this
         Agreement. Neither August Technology or Distributor will be liable to
         the other for damages of any kind, including incidental or
         consequential damages, or for any losses or claims whatsoever on
         account of or arising out of the termination of this Agreement.
         Distributor waives any and all benefit of any law or regulation
         providing compensation arising from the termination or non-renewal of
         this Agreement.

16.      POST TERMINATION COOPERATION:

         Upon receipt of notice of termination, and during the remaining period
         of this Agreement, Distributor agrees to use its best efforts to carry
         out an orderly transition in the marketing, sales, and service of
         Products in the Territory and to facilitate a transfer of the customers
         to a new distributor or to August Technology, as the case may be.
         Distributor's best efforts shall include, but not be limited to,
         introducing August Technology representatives to each customer,
         providing each customer's corporate name and buyer name, relevant
         addresses, communications information, historical prices charged for
         the Products as well as any other information or actions deemed
         necessary to facilitate the transition.

                                                                         PAGE 13

<PAGE>

17.      NON-COMPETE:

         The Distributor agrees that August Technology would be substantially
         harmed if the Distributor were to compete with August Technology by
         manufacturing, selling, marketing or distributing Competitive Products
         in the Territory, except as provided by the terms of this Agreement In
         partial consideration for the benefits provided to the Distributor
         hereunder, the Distributor agrees as follows: Du ring the term of this
         Agreement and for a period of one (1) years following the termination
         of this Agreement for whatever reason, the Distributor shall not,
         directly or indirectly, manufacture, sell market or distribute
         Competitive Products in the Territory, except as provided by the terms
         of this Agreement.

18.      FORCE MAJEURE:

         Neither party will be liable, or deemed to be in breach of this
         Agreement, by reason of any act, delay or omission caused by labor
         disputes, lockouts, or other labor disputes, regulations; ordinances,
         or order of a court of competent jurisdiction, act of government, act
         of God, war, riot, epidemic, flood, earthquake or like natural
         disaster, embargo or quarantine, or any other cause beyond the
         reasonable control of the party claiming force majeure. The party whose
         performance will have been prevented or delayed must provide immediate
         written notice to the other party explaining the nature of the act,
         delay or omission, and the date such condition commenced. The party
         also agrees to provide further written notice when the condition has
         ended.

19.      GOVERNMENT EXPORT RESTRICTIONS:

         Distributor agrees that the Products purchased will not be exported y
         or indirectly, separately or as part of a system, without complete and
         full compliance with the export and re-export restrictions imposed by
         U.S. export laws and regulations. Distributor also agrees to take
         reasonable action to assure that no customer contravenes the U.S. laws
         and regulations.

20.      NOTICES:

         20.1     Notices - Any notices required or permitted to be given under
         this Agreement shall be sufficient if in writing and sent by registered
         or certified mail to the address of the party set forth below. The
         parties hereto may change the address to which notices may be sent by
         giving written notice of such change of address to the other party:

                                                                         PAGE 14

<PAGE>

                            If to August Technology:

                       Vice President, Sales and Marketing
                             August Technology, Inc.
                           5237 Edina Industrial Blvd.
                              Edina Minnesota 55439

                             If to the Distributor:

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

                                 With a copy to:

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

21.      GENERAL PROVISIONS:

         21.1     ASSIGNMENT - This Agreement shall be binding upon and inure to
         the benefit of August Technology and the Distributor, and their
         respective successors and permitted assigns. August Technology may
         assign or transfer this Agreement without the permission of
         Distributor.' Any attempted assignment or further in violation of the
         Agreement will be void or effect a termination at the election of
         August Technology. Both parties agree to advise each other of any
         change in ownership, control or operating arrangements.

         21.2     WAIVER - Either party's failure to enforce any provisions of
         this Agreement will not be deemed a waiver of that provision or of the
         right to enforce it in the future.

         21.3     APPLICABLE LAW, MERGER - This Agreement will be governed by
         the laws of the State of Minnesota, USA and specifically excludes the
         United States Convention on Contracts of International Sales of Goods.
         This Agreement, including the attached Exhibits, contains the entire
         and only understanding between the parties, and supersedes all prior
         agreements, either written or oral relating to the subject matter of
         this Agreement. No modifications to this Agreement will be binding on
         either party, unless in writing and signed by both parties.

         21.4     SEVERANCE - If any provision of this Agreement will be
         determined illegal, invalid, or unenforceable, that provision will be
         understood and enforced as if it had been more narrowly drawn so as not
         to be illegal, invalid or unenforceable. Any determination will have no
         effect upon the enforceability of any other provision of this
         Agreement.

         21.5     ARBITRATION - All disputes, controversies or differences which
         may arise between the parties hereto, out of, in relation to or in
         connection with this Agreement or any purchase order for Products
         entered into pursuant hereto, or for the breach hereof or

                                                                         PAGE 15

<PAGE>

         thereof, which cannot be resolved amicably by the parties shall be
         finally settled by arbitration in Minneapolis, Minnesota, pursuant to
         the Commercial Arbitration Rules of the American Arbitration
         Association or its successor, before a panel of one (1) arbitrator to
         be selected in accordance with said rules. Arbitration proceedings
         shall be conducted in the English language. The parties to the
         arbitration shall be provided the opportunity to conduct reasonable
         discovery in accordance with the Federal Rules of Civil Procedure. The
         arbitrator shall establish a discovery schedule and shall rule on all
         discovery issues. The arbitration award rendered shall be final and
         binding upon all the parties and may be reduced to a judgment in a
         court of competent jurisdiction. The arbitration and all proceedings
         related thereto and any award of the arbitrator shall be held in strict
         confidence by the parties. The nonprevailing party shall pay the
         prevailing party's attorney's fees and costs including the arbitrator's
         fees and costs. The award will include interest from the date of any
         damages incurred for breach or other violation of the Agreement until
         the award is paid in full at a rate to be fixed by the arbitrator, but
         in no event less than the London Interbank Offering Rate "LIBOR") per
         annum quoted for the corresponding period by the Bank of America in the
         London Interbank Market of United States Dollars for immediately
         available funds.

         21.6     INJUNCTIONS, OTHER REMEDIES AND PERFORMANCE - The parties
         agree that a breach or a threat of a breach of any provision of
         Sect-ions 10, 14 or 17 herein would result in irreparable injury. The
         parties agree that a party may seek to enforce any or all of Sections
         10, 14 or 17 by applying to the State or Federal District Court in and
         for the State of Minnesota, or any other court of general jurisdiction,
         for injunctive relief only pending commencement and completion of
         arbitration proceedings. The court shall refer proceedings to the
         arbitrator selected herein to determine whether any injunctive relief
         issued hereunder shall be made permanent or be dissolved. The
         arbitrator's finding shall be binding and conclusive upon the parties.
         The non-prevailing party shall pay the prevailing party's attorney's
         fees and court costs.

21.7     COUNTERPARTS - This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective, duly authorized representatives as of the day and year
first above written.

DISTRIBUTOR:                                ACCEPTED BY:

Metron Technology                           August Technology Corporation

       WITH CONTINGENCIES (SEE BELOW)
-------------------------------------       ------------------------------------

Authorized Signature                        Authorized Signature

Title:                                      Title:
      -------------------------------             ------------------------------

                                                                         PAGE 16

<PAGE>

The agreement is being signed with the understanding that Exhibit C will be
negotiated further during the week of September 13, 1999. Ratification of this
agreement is contingent upon consent by both parties on the contents of Exhibit
C after those discussions.

                                                                         PAGE 17

<PAGE>

EXHIBIT A:        PRODUCTS

Distributor is granted the right to distribute the following August Technology
Products under the terms of this Agreement.

(1)      CV SERIES - AUTOMATIC CASSETTE INSPECTION SYSTEMS

(2)      NSX SERIES - AUTOMATIC 2ND OPTICAL DEFECT INSPECTION SYSTEMS

Spare parts agreement for each product granted will be as follows:

(1)      CV SERIES - AUTOMATIC CASSETTE INSPECTION SYSTEMS - because the CV
         Series is generally considered to be a "non-production critical" tool,
         it is the Distributor's responsibility to determine each individual
         customer's requirements for spare parts (August Technology will provide
         a recommended spare parts list). Once determined, the Distributor or
         customer is responsible for purchasing these spare parts for local
         stocking.

(2)      NSX SERIES - AUTOMATIC 2ND OPTICAL DEFECT INSPECTION SYSTEMS - because
         the NSX Series is considered to be a "production critical" tool locally
         stocked spare parts are highly recommended. It is the Distributor's
         responsibility to determine each individual customer's requirements for
         spare parts (August Technology will provide a recommended spare parts
         list). Once determined, the Distributor or customer is responsible for
         purchasing these spare parts for local stocking.

NOTE:

Additional Products may be added from time to time by mutual consent and
official amendment to this Exhibit A.

                                                                         PAGE 18

<PAGE>

EXHIBIT B: PRICING, DISCOUNT, AND TERMS

Distributor agrees to pay August Technology for Products purchased based on a
set discount from official published Price Lists, or a set discount from special
pricing quoted by August Technology for mutually agreed to custom projects. The
current applicable Price List for Products and spare parts will be provided and
updated by August Technology on a regular basis.

All pricing is Ex-works (INCOTERMS 1990) at August Technology's factory,
including airfreight.

Distributor agrees to pay all freight insurance, requested interim storage fees,
bank transfer fees, and all international taxes and customs duties assessed on
each order.

Distributor's set discount from official published International Price Lists
will be:  17.5%

Distributor agrees to make all payments in US$ for Products based on the
following terms:

         100% on shipment net 45 days.

         Note:    August Technology views each Distributor as its only
                  "customer" in the Territory, and provides a set discount based
                  on this business model. Payment terms are also based on this
                  business model. Any changes to this model may require August
                  Technology to assume additional business risk, and will
                  require changes to the set discount. August Technology does
                  not expect to participate or be directly involved with any
                  individual customer negotiations (such as pricing, payment
                  terms, delivery, training, warranty, etc.) - this is the full
                  responsibility of the Distributor.

         Distributor agrees to make all payments to August Technology by the
         following method:

                  Direct wire transfer to August Technology's bank. Detailed
                  bank account information is:

                           Norwest Band N.A.
                           Routing # 091000019
                           Swift Code:  NWNBUS44
                           Beneficiary Bank:  Marquette Capital Bank
                           Account Number 6355010918
                           Phone Wire Transfer at:  1-612-525-5944
                           For further credit to:
                           Beneficiary Name:  August Technology
                           Beneficiary Account # 1810820753

                                                                         PAGE 19

<PAGE>

NOTES:

August Technology agrees that the following customers should be approached in a
global strategy with regards to pricing and that both parties will work together
to develop pricing that will allow a global price yet protect both parties gross
margin interests: Intel, Motorola, AMD, Philips and STM.

August Technology agrees that further development is needed on global pricing
and the International Price List. August Technology commits to have this
developed by the end of Ql 2000 and to work with Distributor in the development
of this pricing strategy so that it protects both parties gross margins.

Engineering services, field service labor charges, and personnel travel expenses
are not subject to discounting or commission.

                                                                         PAGE 20

<PAGE>

EXHIBIT C: SPECIAL ACCOUNTS

The following customers who have offices, facilities, factories, fabs, or any
other business facilities within the Territory will be considered Special
Accounts, which will remain exclusive to August Technology regarding all
business activities (including, but not limited to, sales, marketing, and
service support):

August Technology's previous distributor in the Region, Eberts/SET, will
continue to represent August Technology at the following accounts for the
specified products until either a purchase order is received from the customer
for the unit described or December 31, 1999, whichever occurs first.

         NSX Series

                  Philips, KaoHsiung, Taiwan
                  ASE KaoHsiung, Taiwan
                  Chipbond, Taiwan
                  Winbond, Taiwan
                  Amkor, Phillipines
                  Linear Technology, Penang, Malaysia

         CV Series

                  TSMC Hsinchu Taiwan
                  USC Hsinchu, Taiwan
                  SIS Taiwan

                                                                         PAGE 21

<PAGE>

EXHIBIT D: TERRITORY

August Technology hereby appoints Distributor as an authorized, independent,
exclusive Distributor for the Products, for the purpose of reselling and
servicing the Products directly to its customers in the following countries:

                                   South Korea
                                      China
                                    Hong Kong
                                     Taiwan
                                    Thailand
                                    Malaysia
                                   Phillipines
                                    Singapore
                                      India

                                                                         PAGE 22

<PAGE>

EXHIBIT E: PURCHASE ORDER

In order to receive Products, Distributor agrees to deliver to August Technology
a hard copy purchase order. All purchase orders issued by Distributor will
include the following information:

a)       Final customers name (end user) , location and customers official
         purchase order number
b)       Distributor purchase order number
c)       Ship To location
d)       Bill To location and accounts payable contact person
e)       Method of shipment, including contact person and phone number
f)       Quantity and description of each item being purchased
g)       Details of any options purchased
h)       Pricing
i)       Requested ship dates
j)       Power requirements
k)       Environmental Requirements, if any (cleanroom specifications, etc)
l)       Any other special requirements, such as customer part number, drawing
         numbers or samples.

                                                                         PAGE 23

<PAGE>

EXHIBIT F:  AUGUST TECHNOLOGY STATEMENT OF WARRANTY

Hardware Products - August Technology warrants that it will repair or replace,
at its option, hardware Products which are found to be defective in material or
workmanship. August Technology must receive written notification of any defect
within fourteen (14) months from date of shipment. All transportation charges
associated with hardware Products warranty will be arranged and paid for by
August Technology.

Software Products - August Technology warrants that it will repair or replace,
at its option, software Products which fad in a manner which significantly and
adversely affects operating performance as specified in August Technology's
published Products description. August Technology must receive written
notification of any failure to conform within fourteen (14) months from date of
shipment. August Technology does not warrant that the software Products are free
from errors. All transportation charges associated with software Products
warranty will be arranged and paid for by August Technology.

The foregoing warranties will not apply to any deficiency or defect resulting
from:

         (a)      Normal wear and tear, or items subject to deterioration,
                  breakage, or burnout through use.
         (b)      Installation or maintenance by customer or any third party
                  (other dm Distributor).
         (c)      Modifications or alterations made by customer or any third
                  party without August Technology's written consent.
         (d)      Misuse or abuse.
         (e)      Failure of customer to maintain the equipment site, and
                  environmental conditions as required for the normal operation
                  of the Products.
         (f)      Causes beyond August Technology's reasonable control.

August Technology makes no other warranty, either expressed or implied,
including, but not limited to, any implied warranty of merchantability or
fitness for a particular purpose, or arising from course of dealing or usage of
trade. The foregoing constitutes August Technology's sole obligation and the
exclusive remedies of the customer for any breach by August Technology of the
warranties contained in this Agreement. August Technology's total liability
under this Section will be limited to the repair or replacement of Products and
will in no case exceed the value of the purchase order.

                                                                         PAGE 24

<PAGE>

EXHIBIT G: WORLDWIDE SALES AND SERVICE SUPPORT PLAN

                          AUGUST TECHNOLOGY CORPORATION

                     WORLDWIDE SALE'S & SERVICE SUPPORT PLAN

This Plan will define how each Distributor is compensated (paid) when equipment
is shipped into their Territory, August Technology recognizes three (3) periods
of time as shown below.

(1)      Pre-Warranty Period (Installation & Training)
(2)      Warranty Period / Local Service Support (12 months after ship date from
         August
(3)      After Warranty Period (Ongoing Service Support - billable by
         Distributor)

THE PRE- WARRANTY period is for INSTALLATION AND TRAINING of a system once it
has been shipped to the customer. The WARRANTY period is for 12 MONTHS AFTER
SHIPMENT FROM AUGUST TECHNOLOGY. The AFTER-WARRANTY period is for ON-GOING
SERVICE SUPPORT once the standard equipment warranty expires. August Technology
recognizes that the Distributor must be compensated for providing customer
service support during each of these periods.

FOR EXAMPLE: When Distributor "A" takes a purchase order for a CV system in
their Territory, and the customer requests shipment of the system into
Distributor "B" Territory, special arrangements must be made for Installation &
Training and Local Service Support. In this case, DISTRIBUTOR "B" IS RESPONSIBLE
FOR ALL THREE periods -

(1)      Pre-Warranty Period (Installation & Training):  Distributor "N' pays
         for the PRE- WARRANTY (Installation & Training) period.
(2)      Warranty Period (one (1) Year Local Service Support): August Technology
         pays Distributor "B" a 1/3 commission' for the WARRANTY period.
         Distributor "A' receives 1/3 less "commission" on the order.
(3)      After Warranty Period (Ongoing Service Support): Distributor "B"
         charges their normal service support rates for the AFTER- WARRANTY
         PERIOD.

                                [GRAPHIC OMITTED]

                                                                         PAGE 25

<PAGE>

AUGUST TECHNOLOGY'S WORLDWIDE SALE AND SERVICE PLAN IS OUTLINED BELOW.

(1)      REQUEST FOR QUOTATION - when Distributor "A" plans to ship a system
         outside their Territory, they must first contact August Technology and
         request a quotation for the Pre-Warranty Period (Installation &
         Training) at the location where the system will be installed. August
         Technology will contact Distributor "B", request a quotation, and
         forward this quotation to the Distributor "A".

(2)      PRE-WARRANTY PERIOD (INSTALLATION & TRAINING) Distributor "A" must
         include in their pricing the cost of the PreWarranty Period
         (Installation & Training) quoted by Distributor "B". When Distributor
         "A" orders the system from August Technology, their purchase order will
         include: [a] Pre-Warranty Period (Installation & Training), [b]
         equipment, [c] any options ordered.(3) DISTRIBUTOR DISCOUNT ADJUSTMENTS
         MADE - August Technology provides every Distributor and equipment
         purchase discount. This Discount has three (3) parts:

         [1] 1/3, for Project Specification.
         [2] 1/3, for Purchase Order.
         [3] 1/3, for (In-Warranty) Service Support.

in the example shown on the first page, Distributor "A" would receive a 2/3
equipment purchase discount from the list price (for project specification and
purchase order). Distributor "B" would be paid by August Technology for the
Pre-Warranty Period (Installation & Training) of the system (based on the
earlier quotation from Distributor plus 1/3 of the system list price for local
service support during the WARRANTY period.

TO COMPLETE THE EXAMPLE ON THE FIRST PAGE:

Distributor "A" completes the negotiations with LG (Lucky Goldstar) for the
equipment specification and purchase order. LG plans to have the system shipped
to their new factory in the U.K. In this case, Distributor "X' would first
contact August Technology and inform them of these plans.

August Technology would immediately contact Distributor "B" and request
a-quotation for installation and training of the system at LG's site in the U.K.
This quotation is reviewed by August Technology and then forwarded to
Distributor ")V'. Distributor "A" would then add this amount to their quotation
to LG for a complete system package (equipment, options, and local installation
and training).

Once LG places the order, Distributor "A" would order from August Technology,
including equipment, any options, and local installation and training support
for the U.K. NOTE THAT DISTRIBUTOR "A" WILL RECEIVE 2/3 OF THEIR NORMAL
EQUIPMENT DISCOUNT FOR THIS order. Distributor "B"` will be paid their quoted
price, by August Technology, for local installation and (FOR PRE-WARRANTY
support), plus 1/3 of their normal equipment discount for this order (for
Warranty support).

                                                                         PAGE 26

<PAGE>

FOR EXTENDED WARRANTY PERIODS (BEYOND 12 MONTHS FROM SHIP DATE FROM AUGUST
TECHNOLOGY.

Should Distributor "A" choose to offer an EXTENDED WARRANTY PERIOD to the
customer, then Distributor "B" will provide a separate quote for this item. When
Distributor "A" orders the system from August Technology, their purchase order
will include: [a] Pre-Warranty Period (Installation & Training), [b] equipment,
[c] any options ordered and [d] EXTENDED WARRANTY PERIOD.

                                                                         PAGE 27

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