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Exhibit 10.32    
  

 
 

REVOLVING NOTE    
  

	$5,000,000	 	Edina, Minnesota

July 26, 2002

        FOR
VALUE RECEIVED, AUGUST TECHNOLOGY CORPORATION, a Minnesota corporation (the "Borrower") promises to pay to the order of EXCEL BANK
MINNESOTA, a Minnesota state banking corporation (the "Bank") at its office in Edina, Minnesota or at such other place as may be designated from time to
time by the holder hereof, in lawful money of the United States of America, the principal sum of Five Million Dollars ($5,000,000) or so much thereof as has been advanced by the Bank to or for the
benefit of the Borrower pursuant to that certain Revolving Credit Agreement, dated as of the date hereof, as amended from time to time, between the Borrower and the Bank (the
"Agreement") and remains unpaid, together with interest on the unpaid principal balance hereof from the date hereof until this Note is fully paid, at an
annual rate of interest, calculated on the basis of actual number of days elapsed in a 360 day year, that shall at all times be equal to the Revolving Interest Rate, as provided in the
Agreement, each change in the interest rate herein to become effective on the day the corresponding change in the Revolving Interest Rate becomes effective. 

        This
Note is payable as follows: (i) interest accruing on this Note shall be due and payable on the last day of each month commencing July 31, 2002, and at maturity or
earlier prepayment in full; and (ii) the principal of this Note and all accrued interest shall be due and payable on April 30, 2004. The Borrower may prepay at any time and from time to
time, all or any portion of the balance from time to time remaining on this Note, without penalty or premium. Payments hereunder shall be applied first to the payment of accrued interest and then to
the reduction of principal. 

        This
Note is secured by the Security Agreement, and other Loan Documents, referred to in the Agreement, and is issued pursuant to and is subject to the Agreement which, among other
things provides for acceleration of the maturity hereof upon the occurrence of an Event of Default, as defined in the Agreement. 

        The
Borrower agrees to pay all costs of collection, including attorneys' fees, in the event this Note is not paid when due. This Note is being delivered in, and shall be governed by, the
laws of the State of Minnesota. Presentment or other demand for payment, notice of dishonor and protest are expressly waived. 

	 	 	AUGUST TECHNOLOGY CORPORATION
	

 	
 	

By:	
 	

	 	 	Its:	 	

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Exhibit 10.32

REVOLVING NOTEQuickLinks
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Exhibit 10.33    
  

 
 

SECURITY AGREEMENT    
  

	DATE:	 	July 26, 2002	 	 
	

PARTIES:	
 	

Excel Bank Minnesota

5050 France Avenue

Edina, MN 55410	
 	

("Secured Party")
	

 	
 	

August Technology Corporation

4900 West 78th Street

Bloomington, MN 55435

Taxpayer Number: 41-1729485

Organizational Charter Number: 7N-863	
 	

("Debtor")

AGREEMENTS:  

        IN CONSIDERATION of one dollar and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows: 

        1.    Grant of Security Interest and Collateral.    In order to secure
payment and performance of each and every debt, liability and obligation of every type and description which Debtor may now or at any time hereafter owe to Secured Party whether such debt, liability
or obligation now exists or is hereafter created or incurred, whether it arises under or is evidenced by this Security Agreement or any other present or future instrument or agreement or by operation
of law, and whether it is or may be direct or indirect, due or to become due, absolute or contingent, primary or secondary, liquidated or unliquidated, or sole, joint, several or joint and several
(all such debts, liabilities and obligations and any amendments, extensions, renewals or replacements thereof are herein collectively referred to as the
"Obligations"), Debtor hereby grants Secured Party a security interest (the "Security Interest") in all
of Debtor's property (the "Collateral"), including without limitation the following: 

        (a)    Inventory and Goods:    All inventory of Debtor, whether now owned or hereafter acquired and wherever located
and other tangible personal property held for sale or lease or furnished or to be furnished under contracts of service or consumed in Debtor's business, and all goods of Debtor, whether now owned or
hereafter acquired and wherever located, including without limitation all computer programs embedded in goods, and all other Inventory and Goods, as each such term may be defined in the Uniform
Commercial Code as in effect in the state of Minnesota from time to time (the "UCC"), of the Debtor, whether now owned or hereafter acquired; 

        (b)    Equipment:    All equipment of Debtor, whether now owned or hereafter acquired and wherever located, including
but not limited to all present and future equipment, machinery, tools, motor vehicles, trade fixtures, furniture, furnishings, office and recordkeeping equipment and all goods for use in Debtor's
business, and all other Equipment (as such term may be defined in the UCC) of the Debtor, whether now owned or hereafter acquired, together with all parts, equipment and attachments relating to any of
the foregoing; 

        (c)    Accounts, Contract Rights and Other Rights to Payment:    Each and every right of Debtor to the payment of
money, whether such right to payment now exists or hereafter arises, whether such right to payment arises out of a sale, lease, license, assignment or other disposition of goods or other property by
Debtor, out of a rendering of services by Debtor, out of a loan by Debtor, out of the overpayment of taxes or other liabilities of Debtor, or otherwise arises under any contract or agreement, whether
such right to payment is or is not already earned by performance, and howsoever such right to payment may be evidenced, together with all other rights and interests (including all liens and security
interests) which Debtor may at any time have by law or agreement against any account debtor or other obligor obligated to make any such payment or against any of 

 

the property of such account debtor or other obligor; all including but not limited to all present and future debt instruments, chattel papers, accounts, license fees, contract rights, loans and
obligations receivable and tax refunds, and all other Accounts (as such term may be defined in the UCC) of the Debtor, whether now owned or hereafter acquired; 

        (d)    Instruments:    All instruments, chattel paper, letters of credit or other documents of Debtor, whether now
owned or hereafter acquired, including but not limited to promissory notes, drafts, bills of exchange and trade acceptances; all rights and interests of Debtor, whether now existing or hereafter
created or arising, under leases, licenses or other contracts, and all other Instruments (as such term may be defined in the UCC) of the Debtor, whether now owned or hereafter acquired; 

        (e)    Deposit Accounts and Investment Property:    All right, title and interest of Debtor in all deposit and
investment accounts maintained with any bank, savings and loan association, broker, brokerage, or any other financial institution, together with all monies and other property deposited or held
therein, including, without limitation, any checking account, savings account, escrow account, savings certificate and margin account, and all securities, whether certificated or uncertificated,
security entitlements, securities accounts, commodity contracts, and commodity accounts, and all other Deposit Accounts and Investment Property (as each such term may be defined in the UCC) of the
Debtor, whether now owned or hereafter acquired; 

        (f)    General Intangibles:    All general intangibles of Debtor, whether now owned or hereafter acquired, including,
but not limited to, applications for patents, patents, copyrights, trademarks, trade secrets, good will, tradenames, customer lists, permits and franchises, software, and the right to use Debtor's
name, and any and all membership interests, governance rights, and financial rights in each and every limited liability company, and all payment intangibles, and all other General Intangibles (as such
term may be defined in the UCC) of the Debtor, whether now owned or hereafter acquired; 

        (g)    Chattel Paper:    All Chattel Paper (as such term may be defined in the UCC) of the Debtor, whether tangible or
electronic, and whether now owned or hereafter acquired; and 

        (h)    Documents, Embedded Software, Etc.:    All of Debtor's rights in promissory notes, documents, embedded
software, letter of credit rights and supporting obligations (and security interests and liens securing them) (as any such term may be defined in the UCC) whether now owned or hereafter acquired; 

together
with all substitutions and replacements for and products of any of the foregoing property and proceeds of any and all of the foregoing property and, in the case of all tangible Collateral,
together with (i) all accessories, attachments, parts, equipment, accessions, repairs and embedded software, now or hereafter attached or affixed to or used in connection with any such goods,
(ii) all warehouse receipts, bills of lading and other documents of title now or hereafter covering such goods, and (iii) all books and records of Debtor. 

        2.    Representations, Warranties and Agreements.    Debtor
represents, warrants and agrees that: 

        (a)  Debtor
is a corporation duly organized, validly existing and in good standing under the laws of the state of Minnesota. This Security Agreement has been duly and validly
authorized by all necessary corporate action. Debtor has full power and authority to execute this Agreement, to perform Debtor's obligations hereunder and to subject the Collateral to the Security
Interest. Debtor's taxpayer identification number and organizational charter number are the numbers shown at the beginning of this Agreement. 

        (b)  The
Collateral will be used primarily for business purposes. 

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        (c)  Debtor's
chief place of business is located at the address shown at the beginning of this Agreement. Debtor's records concerning its accounts and contract rights are
kept at such address. The Collateral is located at the address shown at the beginning of this Agreement. Debtor will give at least 30 days' advance written notice to Secured Party of any change
in Debtor's jurisdiction of organization or chief place of business and any change in or addition of any Collateral location. 

        (d)  Except
as otherwise provided in that certain Revolving Credit Agreement, dated as of the date hereof, between Secured Party and Debtor (the "Loan
Agreement"), Debtor has (or will have at the time Debtor acquires rights in Collateral hereafter arising) and will maintain absolute title to each item of Collateral free and
clear of all security interests, liens and encumbrances, except the Security Interest, and will defend the Collateral against all claims or demands of all persons other than Secured Party. 

        (e)  Except
as otherwise provided in the Loan Agreement, Debtor will not sell or otherwise transfer or dispose of the Collateral or any interest therein. 

        (f)    Debtor
will not permit any tangible Collateral to be located in any state (and, if a county filing is required, in any county) in which a financing statement covering
such Collateral is required to be, but has not in fact been, filed. 

        (g)  All
rights to payment and all instruments, documents, chattel papers and other agreements constituting or evidencing Collateral are (or will be when arising or issued)
the valid, genuine and legally enforceable obligation, subject to no defense, set-off or counterclaim (other than those arising in the ordinary course of business) of each account debtor
or other obligor named therein or in Debtor's records pertaining thereto as being obligated to pay such obligation. Debtor will not agree to any modification, amendment or cancellation of any such
obligation without Secured Party's prior written consent except discounts provided by Debtor in the ordinary course of business, and will not subordinate any such right to payment to claims of other
creditors of such account debtor or other obligor. 

        (h)  Debtor
will keep all tangible Collateral in good repair, working order and condition, normal depreciation excepted, and will, from time to time, replace any worn, broken
or defective parts thereof. 

        (i)    Except
as otherwise provided in the Loan Agreement, Debtor will promptly pay all taxes and other governmental charges levied or assessed upon or against any Collateral
or upon or against the creation, perfection or continuance of the Security Interest. 

        (j)    Debtor
will promptly notify Secured Party of any material loss of or damage to any Collateral or of any adverse change in the prospect of payment of any material sums
due on or under any instrument, chattel paper, account or contract right constituting Collateral. 

        (k)  Debtor
will if Secured Party at any time so requests (whether the request is made before or after the occurrence of an Event of Default), promptly deliver to Secured
Party any instrument, document or chattel paper constituting Collateral, duly endorsed or assigned by Debtor to Secured Party. 

        (l)    Debtor
will at all times keep all tangible Collateral insured against risks of fire (including so-called extended coverage), theft, and such other risks and
in such amounts as Secured Party may reasonably request, with any loss payable to Secured Party to the extent of its interest. 

        (m)  Debtor
hereby authorizes the filing of such financing statements as Secured Party may deem necessary or useful to be filed in order to perfect the Security Interest and,
if any Collateral is covered by a certificate of title, Debtor will from time to time execute such documents as may be required to have the Security Interest properly noted on a certificate of title.
In addition, Debtor authorizes Secured Party to file from time to time such financing statements against the 

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Collateral described as "all personal property" or "all assets" or the like as Secured Party deems necessary or useful to perfect the Security Interest. 

        (n)  Debtor
will pay when due or reimburse Secured Party on demand for all costs of collection of any of the Obligations and all other out-of-pocket
expenses (including in each case all reasonable attorneys' fees) incurred by Secured Party in connection with the creation, perfection, satisfaction or enforcement of the Security Interest or the
execution or creation, continuance or enforcement of this Security Agreement or any or all of the Obligations. 

        (o)  Debtor
will take all such actions as Secured Party may reasonably request to permit the Secured Party to establish and perfect the Security Interest in all jurisdictions
Secured Party deems necessary. Without in any way limiting the generality of the foregoing, Debtor will execute, deliver or endorse any and all instruments, documents, assignments, security agreements
and other agreements and writings which Secured Party may at any time reasonably request in order to secure, protect, perfect or enforce the Security Interest and Secured Party's rights under this
Security Agreement. 

        (p)  Debtor
will not use or keep any Collateral, or permit it to be used or kept, for any unlawful purpose or in violation of any federal, state or local law, statute or
ordinance. 

If
Debtor at any time fails to perform or observe any of the foregoing agreements, immediately upon the occurrence of such failure, without notice or lapse of time, Secured Party may (but need not)
perform or observe such agreement on behalf and in the name, place and stead of Debtor (or, at Secured Party's option, in Secured Party's own name) and may (but need not) take any and all other
actions which Secured Party may reasonably deem necessary to cure or correct such failure (including, without limitation, the payment of taxes, the satisfaction of security interests, liens, or
encumbrances, the performance of obligations under contracts or agreements with account debtors or other obligors, the procurement and maintenance of insurance, the execution of financing statements,
the endorsement of instruments, and the procurement of repairs, transportation or insurance); and, except to the extent that the effect of such payment would be to render any loan or forbearance of
money usurious or otherwise illegal under any applicable law, Debtor shall thereupon pay Secured Party on demand the amount of all moneys expended and all costs and expenses (including reasonable
attorneys' fees) incurred by Secured Party in connection with or as a result of Secured Party's performing or observing such agreements or taking such actions, together with interest thereon from the
date expended or incurred by Secured Party at the highest rate then applicable to any of the Obligations. To facilitate the performance or observance by Secured Party of such agreements of Debtor,
Debtor hereby irrevocably appoints (which appointment is coupled with an interest) Secured Party, or its delegate, as the attorney-in-fact of Debtor with the right (but not the
duty) from time to time to create, prepare, complete, execute, deliver, endorse or file, in the name and on behalf of Debtor, any and all instruments, documents, financing statements, applications for
insurance and other agreements and writings required to be obtained, executed, delivered or endorsed by Debtor under this Section 2. 

        3.    Lock Box; Collateral Account.    If Secured Party so requests at
any time after the occurrence of an Event of Default (as defined in Section 7 of this Agreement), Debtor will direct each of its account debtors to make payments due under the relevant account
or chattel paper directly to a special lock box to be under the control of Secured Party (the "Lock Box"). Debtor hereby authorizes and directs Secured
Party to deposit into a special collateral account to be established and maintained with Secured Party (the "Collateral Account") all checks, drafts,
and cash payments received in the Lock Box. All deposits in the Collateral Account shall constitute proceeds of Collateral and shall not constitute payment of any Obligation. At its option, Secured
Party shall, at any time, apply finally collected funds on deposit in the Collateral Account to the payment of the Obligations in such order of application as Secured Party may determine, or permit
Debtor to withdraw all or any part of the balance. If a Lock Box is so established, Debtor agrees that it will promptly deliver to Secured Party, 

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for deposit into the Lock Box, all payments on accounts and chattel paper received by it. All such payments shall be delivered to Secured Party in the form received (except for Debtor's endorsement
where necessary). Until so deposited, all such payments on accounts and chattel paper received by Debtor shall be held in trust by Debtor for and as the property of Secured Party and shall not be
commingled with any funds or property of Debtor. 

        4.    Account Verification and Collection Rights of Secured
Party.    Secured Party shall have the right to verify any accounts in the name of Debtor or in Secured Party's own name; and Debtor, whenever requested, shall
furnish Secured Party with duplicate statements of the accounts, which statements may be mailed or delivered by Secured Party for that purpose. Whether or not Secured Party exercises its rights under
Section 3 of this Agreement, Secured Party may at any time (whether before or after the occurrence of an Event of Default) notify any account debtor or any other person obligated to pay any
amount due, that such chattel paper, account or other right to payment has been assigned or transferred to Secured Party for security and shall be paid directly to Secured Party. If Secured Party so
requests at any time (whether before or after the occurrence of an Event of Default), Debtor will so notify such account debtors and other obligors in writing and will indicate on all invoices to such
account debtors or other obligors that the amount due is payable directly to Secured Party. At any time after Secured Party or Debtor gives such notice to an account debtor or other obligor, Secured
Party may (but need not), in Secured Party's own name or in Debtor's name, demand, sue for, collect or receive any money or property at any time payable or receivable on account of, or securing, any
such chattel paper, account or other right to payment, or grant any extension to, make any compromise or settlement with or otherwise agree to waive, modify, amend or change the obligations (including
collateral obligations) of any such account debtor or other obligor. 

        5.    Assignment of Insurance.    Debtor hereby assigns to Secured
Party, as additional security for the payment of the Obligations, any and all moneys (including but not limited to proceeds of insurance and refunds of unearned premiums) due or to become due under,
and all other rights of Debtor under or with respect to, any and all policies of insurance covering the Collateral, and Debtor hereby directs the issuer of any such policy to pay any such moneys
directly to Secured Party. Both before and after the occurrence of an Event of Default, Secured Party may (but need not), in Secured Party's own name or in Debtor's name, execute and deliver proofs of
claim, receive all such moneys, endorse checks and other instruments representing payment of such moneys, and adjust, litigate, compromise or release any claim against the issuer of any such policy.
Notwithstanding the foregoing, Debtor shall be entitled to use any such insurance proceeds to repair or replace any Collateral so long as no Default (as defined in the Loan Agreement) or Event of
Default (as defined in the Loan Agreement) then exists. 

        6.    Right to Offset.    Nothing in this Agreement shall be deemed a
waiver or prohibition of Secured Party's right of banker's lien, offset, or counterclaim, which right Debtor hereby grants to Secured Party. 

        7.    Events of Default.    The occurrence of any Event of Default, as
defined in Section 10.1 of the Loan Agreement, shall constitute an Event of Default hereunder. 

        8.    Remedies Upon Event of Default.    Upon the occurrence of an
Event of Default and at any time thereafter until such Event of Default is cured to the written satisfaction of Secured Party, Secured Party may exercise any one or more of the rights or remedies set
forth in Section 10.2 of the Loan Agreement. All rights and remedies of Secured Party shall be cumulative and may be exercised singularly or concurrently, at Secured Party's option, and the
exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other. 

        9.    Other Personal Property.    If at the time Secured Party takes
possession of any tangible Collateral, any goods, papers or other properties of Debtor, not affixed to or constituting a part of such Collateral, are located or to be found upon or within such
Collateral, Debtor agrees to notify Secured Party in writing of that fact, describing the property so located or to be found, within 7 calendar days 

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after the date on which Secured Party took possession. Unless and until Secured Party receives such notice from Debtor, Secured Party shall not be responsible or liable to Debtor for any action taken
or omitted by or on behalf of Secured Party with respect to such property without actual knowledge of the existence of any such property or without actual knowledge of the fact that it was located or
to be found upon such Collateral. 

        10.    Amendment; Waivers.    This Agreement can be waived, modified,
amended, terminated or discharged, and the Security Interest can be released, only explicitly in a writing signed by Secured Party and Debtor. A waiver shall be effective only in the specific instance
and for the specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any of Secured Party's rights or remedies. 

        11.    Notices.    All notices to be given to Debtor shall be deemed
sufficiently given if mailed by registered or certified mail, postage prepaid, or delivered to Debtor at Debtor's address set forth above or at the most recent address shown on Secured Party's
records. 

        12.    Miscellaneous.    Secured Party's duty of care with respect to
Collateral in its possession (as imposed by law) shall be deemed fulfilled if Secured Party exercises reasonable care in physically safekeeping such Collateral or, in the case of Collateral in the
custody or possession of a bailee or other third person, exercises reasonable care in the selection of the bailee or other third person, and Secured Party need
not otherwise preserve, protect, insure or care for any Collateral. Secured Party shall not be obligated to preserve any rights Debtor may have against prior parties, to realize on the Collateral at
all or in any particular manner or order, or to apply any cash proceeds of Collateral in any particular order of application. This Agreement shall be binding upon and inure to the benefit of Debtor
and Secured Party and their respective representatives, successors and assigns and shall take effect when signed by Debtor and delivered to Secured Party, and Debtor waives notice of Secured Party's
acceptance hereof. This Agreement shall be governed by the internal laws of the State of Minnesota, without giving effect to the conflicts of laws principles thereof. 

(The signature page follows.)  

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        THE PARTIES have executed this Security Agreement the day and year first above written. 

	Secured Party:	 	EXCEL BANK MINNESOTA
	

 	
 	

By:	
 	

 Its Vice President
	

Debtor:	
 	

AUGUST TECHNOLOGY CORPORATION
	

 	
 	

By:	
 	

	 	 	 	 	Its	

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QuickLinks

Exhibit 10.33

SECURITY AGREEMENT

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