ACQUISITION AGREEMENT

THIS ACQUISITION AGREEMENT (this Agreement) is entered into as of January 25, 2006, by and among Tyler Acquisition Corp., a Delaware corporation (the Purchaser), Kulicke and Soffa Industries, Inc., a Pennsylvania corporation (the Seller) and K&S Interconnect, Inc., a Delaware corporation and a wholly-owned subsidiary of the Seller (Interconnect and, together with Seller and Kulicke and Soffa (Suzhou), Ltd., a corporation organized under the laws of the Peoples Republic of China and a wholly-owned subsidiary of the Seller (K&S Suzhou), the Seller Group). Certain other capitalized terms used in this Agreement are defined in the appended Exhibit A.

BACKGROUND

The Seller Group is engaged in the manufacture of package test interconnect solutions (the Business), principally through Interconnect and K&S Suzhou. This Agreement contemplates the sale and transfer by the Seller Group to the Purchaser (or Affiliates of the Purchaser formed after the date hereof (including Affiliates formed under the laws of jurisdictions outside the United States) for the sole purpose of effectuating the transactions contemplated hereunder (the Purchaser Entities)) of all of the assets and certain liabilities primarily relating to the Business. Such sale and transfer shall involve, among other matters, the following:

A. at the Initial Closing, the Seller Group will sell and assign to the Purchaser or the Purchaser Entities, and the Purchaser or the Purchaser Entities will purchase and assume from the Seller Group, all of the assets and certain liabilities primarily relating to the Business (other than such assets and liabilities related to the operation of the Business in China) on the terms and conditions set forth in this Agreement;

B. at the Initial Closing, the Seller Group will sell to the Purchaser or the Purchaser Entities all of the Intellectual Property rights owned by them and used in the Business, each pursuant to the intellectual property agreement as further described herein;

C. at the Initial Closing, in connection with the transactions described above, the Seller and/or certain of its Affiliates (including K&S Suzhou), on one hand, and the Purchaser or the Purchaser Entities, on the other hand, will enter into certain subleases and a transition services agreement as further described herein; and

D. at the China Closing, the Seller Group will sell and assign to the Purchaser or the Purchaser Entities, and the Purchaser or the Purchaser Entities will purchase and assume from the Seller Group, all of the assets and certain liabilities primarily relating to the Business that are related to the operation of the Business in China.

In consideration of the foregoing, and the mutual representations, warranties and covenants set forth in this Agreement, and for other good and valuable consideration, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE 1

THE TRANSACTIONS

1.1 Purchase and Sale of Certain Assets and Assumption of Certain Liabilities.

(a) Upon the terms and conditions set forth in this Agreement, at the Initial Closing or the China Closing, as applicable, the Seller Group shall sell, convey, assign, transfer and deliver to the Purchaser or the Purchaser Entities, and the Purchaser or the Purchaser Entities shall purchase, acquire and accept from the Seller Group, the assets used primarily in the Business (the Acquired Assets), free and clear of any Claims (other than Permitted Claims), including the following:

(i) all Inventory and all furniture, fixtures, improvements, equipment (including office equipment), machinery, parts, computer hardware, tools, vehicles and all other tangible personal property that is used or held for use primarily in the Business, including that listed on Schedule 1.1(a)(i);

(ii) all Business Intellectual Property, and all tangible embodiments and copies thereof, including that listed on Schedule 1.1(a)(ii), together with any claims against third Persons for infringement, misappropriation or other violation of any such Intellectual Property, whether for any past, present or future infringement, misappropriation or other violation;

(iii) all claims and rights (and benefits arising therefrom) to the extent relating to the Acquired Assets with or against all persons, including all express or implied warranties from any supplier of the Seller Group with respect to the assets listed in Section 1.1(a)(ii), in each case to the extent such transfer is permitted by law;

(iv) all Accounts Receivable that relate primarily to the Business, including those listed on Schedule 1.1(a)(iv) (to the extent not paid as of the Initial Closing);

(v) all contracts, agreements and purchase and sales orders that relate exclusively to the Business, to the extent transferable, that are listed on Schedule 1.1(a)(v) and any other contracts, agreements and purchase and sales orders that relate exclusively to the Business that are entered into after the date hereof in compliance with Section 5.1(a)(iv) (the Assumed Contracts);

(vi) all licenses, Permits or Authorizations that are used primarily in the Business, to the extent transferable, including those listed on Schedule 1.1(a)(vi);

(vii) all rights under insurance policies applicable to the Acquired Assets or the Business;

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(viii) subject to proration as described in Section 1.5, all Prepaids relating exclusively to the Business;

(ix) all goodwill of the Business, together with the right to represent to third parties that the Purchaser is the successor to or acquirer of the Business;

(x) the Books and Records;

(xi) all of the Sellers claims and causes for action for Losses that relate to the operation of the Business and/or the Acquired Assets, whether choate or inchoate, known or unknown, contingent or noncontingent (except to the extent that such claims and causes of action relate to the Excluded Assets or Excluded Liabilities);

(xii) the content of the Sellers website relating exclusively to the Business, including the EasySockets software and any domain names and associated Intellectual Property; and

(xiii) all other assets, if any, listed on Schedule 1.1(a)(xiii).

For the sake of clarity, and notwithstanding any provision of this Agreement to the contrary, the Acquired Assets shall not include any of the assets identified on Schedule 1.1(a), which shall be retained by the Seller Group (the Excluded Assets).

(b) Upon the terms and conditions set forth in this Agreement, at the Initial Closing or the China Closing, as applicable, the Purchaser shall assume and thereafter satisfy or perform when due (i) all accounts payable incurred in the ordinary course of operation of the Business as of the Initial Closing Date or the China Closing Date, as applicable, including those listed on Schedule 1.1(b) to this Agreement (to the extent not paid as of the Initial Closing or the China Closing, as applicable), (ii) all executory liabilities and obligations of the Business that may be performed after the Initial Closing Date or the China Closing Date, as applicable, without penalty under the Assumed Contracts, whether arising before or after the Initial Closing Date or the China Closing Date, as applicable (other than liabilities or obligations arising as a result of any breach of any Assumed Contract by any member of the Seller Group) and (iii) all liabilities and obligations expressly set forth on Schedule 1.1(b), including those arising under the Subleases (the Assumed Liabilities). The Purchaser does not assume, agree to perform or discharge or to indemnify the Seller against, or otherwise have any responsibility or obligation for or with respect to any Liabilities of the Seller Group, whether fixed or contingent, known or unknown, matured or unmatured, liquidated or unliquidated, secured or unsecured, and whether arising prior to, on or after the date hereof except for the Assumed Liabilities (the Excluded Liabilities). Each member of the Seller Group agrees to satisfy and perform when due the Excluded Liabilities. Without limiting the generality of the preceding two sentences, the Excluded Liabilities include the following Liabilities of the Seller Group, except that Excluded Liabilities (x) do not include Liabilities that are expressly included in the definition of Assumed Liabilities and (y) do not include Liabilities incurred by Purchaser after the Initial Closing in the conduct of the Business by the Purchaser or Purchaser Entities (provided that this clause (y) shall not derogate in any way the rights of the Purchaser to bring claims against the Seller Group for any breaches of representations or warranties under this Agreement):

(i) any Liability that relates to, or otherwise arises out of, the Business Products sold or rendered by the Seller Group, including any warranty or guarantee obligations or Liabilities in respect of claims for defective Business Products and any obligations and Liabilities for refunds, adjustments, allowances, repairs, exchanges, returns and warranty of merchantability and other similar claims;

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(ii) any Liability under any Contract resulting from any breach thereof by the Seller that occurred on or prior to the Initial Closing Date;

(iii) all Seller Taxes;

(iv) any Liability under, relating to or arising out of any Company Plan;

(v) any Liability for compensation or employee benefits of any kind relating to employees of the Seller Group occurring prior to, on or as a result of the Initial Closing or the China Closing, as applicable, including all liabilities for severance or termination pay or benefits that arise prior to, on or as a result of the Initial Closing or the China Closing, as applicable;

(vi) any Liability arising out of or relating to the Sellers credit facilities or any Claims related thereto;

(vii) any Liability from or relating to any Debt;

(viii) any Liability from or relating to any Environmental Claim;

(ix) any Liability for Losses related to occupational safety, workers or workmens compensation grievance proceedings;

(x) any Liability arising out of or relating to any employee or independent contractor grievance, including those under any employment agreement;

(xi) any Liability for Losses arising from any legal proceeding to which Seller is or becomes a party and which is pending as of the Initial Closing Date;

(xii) any Liability for Losses relating to the Seller failing to observe or comply with any Applicable Law;

(xiii) any Liability in connection with any obligations owing to any Affiliate of the Seller or any Liability of the Business to the Seller or any Affiliate of the Seller;

(xiv) any Liability under this Agreement and the Transaction Agreements (including in respect of obligations from pro rata payments payable under Section 1.5);

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(xv) any Liability for Losses otherwise relating to the Excluded Assets or not associated with the Business or the Acquired Assets; and

(xvi) all costs and expenses incurred by the Seller incident to the negotiation and preparation of this Agreement and its performance and compliance with the agreements and conditions contained herein.

(c) The purchase price for the Acquired Assets is $17,000,000 plus the Assumed Liabilities, as adjusted pursuant to Section 1.4 (the Purchase Price).

1.2 Closings. (a) The parties shall conduct the closing (the Initial Closing) of the transactions contemplated hereby at the offices of Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania on a date specified in writing by Purchaser (on no less than five (5) business days notice) following the satisfaction or waiver of all of the conditions set forth in Article 6 (other than conditions related to actions contemplated to occur at the China Closing), but in no event later than March 28, 2006 (or at such other time and place as the Seller and the Purchaser may agree in writing) (such date of the Initial Closing, the Initial Closing Date).

(b) The parties shall conduct the closing (the China Closing) of the transactions contemplated under the China Agreement at the offices of Gibson, Dunn & Crutcher LLP, Los Angeles, California on a date specified in writing by Purchaser (on no less than five (5) business days notice) following the satisfaction or waiver of the conditions precedent to closing under the China Agreement, but in no event later than September 30, 2006 (or at such other time and place as the Seller and the Purchaser may agree in writing) (such date of the China Closing, the China Closing Date). For the sake of clarity, no assets or liabilities to be sold, conveyed, assigned, transferred, delivered or assumed under the China Agreement shall be deemed sold, conveyed, assigned, transferred, delivered or assumed pursuant to this Agreement.

1.3 Closing Deliveries. (a) At the Initial Closing:

(i) the Seller shall deliver, or shall cause to be delivered, to the Purchaser (i) the certificates and instruments referred to in Section 6.2, (ii) duly executed counterparts of the Transaction Agreements (other than the China Sublease), (iii) duly executed Acquired Assets Transfer Documents, and (iv) instruments of assignment reasonably requested by the Purchaser, reflecting the Purchaser as the assignee; and

(ii) the Purchaser shall deliver to the Seller (i) the certificates and instruments referred to in Section 6.1, (ii) duly executed counterparts of the Transaction Agreements (other than the China Sublease), (iii) duly executed Acquired Assets Transfer Documents, and (iv) instruments of assignment and assumption reasonably requested by the Seller.

(b) At the China Closing:

(i) the Seller shall deliver, or shall cause to be delivered, to the Purchaser (i) any certificates and instruments referred to in the China Agreement, (ii) duly executed counterparts of the China Sublease, (iii) duly executed Acquired Assets Transfer Documents, and (iv) instruments of assignment reasonably requested by the Purchaser, reflecting the Purchaser as the assignee; and

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(ii) the Purchaser shall deliver to the Seller (i) any certificates and instruments referred to in China Agreement, (ii) duly executed counterparts of the China Sublease, (iii) duly executed Acquired Assets Transfer Documents, and (iv) instruments of assignment and assumption reasonably requested by the Seller.

1.4 Payment of Purchase Price; Escrow; Working Capital Adjustment.

(a) At least three business days before the Initial Closing Date, the Seller shall prepare or cause to be prepared, in accordance with GAAP and those principles identified on Schedule 1.4, and shall deliver to the Purchaser, its good faith estimate of Working Capital. At the Initial Closing, (I) the Purchaser shall pay to the Seller the portion of the Purchase Price allocated to the Acquired Assets (other than the Acquired Assets that have a primary nexus in China) pursuant to Section 9.2 (the Initial Purchase Price), (i) plus (or minus) the amount (if any) by which such estimate of Working Capital exceeds (or is less than) $4,732,000 (the level of Working Capital as set forth in the preliminary statement of Working Capital included on Schedule 1.4) and (ii) minus the Escrow Amount (as defined below), and (II) pursuant to the China Agreement, Purchaser shall cause its Affiliate in China to pay to K&S Suzhou the portion of the Purchase Price allocated to the Acquired Assets that have a primary nexus in China pursuant to Section 9.2 (the China Purchase Price).]

(b) On the Initial Closing Date, on behalf of the Seller, the Purchaser shall deposit into a general escrow account (the Escrow Fund) established pursuant to the Escrow Agreement an amount equal to ten percent (10%) of the cash portion of the Purchase Price (such amount, as from time to time in the Escrow Fund, the Escrow Amount). The Escrow Amount, and any interest earned thereon, shall be maintained in a separate account and disbursed pursuant to the terms of the Escrow Agreement.

(c) Within 60 days following the Initial Closing Date, the Purchaser shall deliver to the Seller a draft of its calculation of Working Capital as of the Initial Closing Date, prepared in accordance with GAAP and those principles identified on Schedule 1.4 and in a manner consistent with the methodology used by Seller in preparing the preliminary calculation of Working Capital included as a part of Schedule 1.4 (the Closing Statement). If the Seller does not give the Purchaser notice of the Sellers objection to the Closing Statement or calculation of Working Capital (such notice must contain a statement of the basis of the Sellers objection), within 30 days of receipt of the Closing Statement, then the Closing Statement shall be final for all purposes.

(d) If the Seller shall have any objections to the Closing Statement or the Purchasers calculation of Working Capital, the Purchaser and the Seller shall attempt in good faith to reach an agreement as to the matter in dispute. If the Purchaser and the Seller shall have failed to resolve such disputed matter within 10 business days after receipt of notice of such objection (or such longer period as mutually agreed by the Purchaser and the Seller), then any such disputed matter may at any time thereafter be referred by either party for resolution by a nationally recognized independent accounting firm acceptable to the Seller and the Purchaser (the Independent Accounting Firm). The Purchaser and the Seller shall take, or cause to be taken, all actions and do, or cause to be done, all things necessary to cooperate with the Independent Accounting Firm in its resolution of the dispute. The determination of the

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Independent Accounting Firm will be made as promptly as practicable. The fees and expenses of the Independent Accounting Firm incurred in resolving the disputed matter shall be allocated equally between the Purchaser and the Seller. The definitive Closing Statement and calculation of Working Capital (the Certified Statement) after resolution of any disputes pursuant to this Section 1.4, shall be verified by the Independent Accounting Firm as in accordance with the requirements of this Section 1.4 and shall be final, binding and conclusive on all parties hereto.

(e) On or before the third business day following the final determination of the Certified Statement, the Purchaser or the Seller, as the case may be, shall pay to the other party an amount such that following such payment, and taking into account the payments made on the Initial Closing Date, the Purchaser shall have paid to the Seller the Initial Purchase Price, (i) plus (or minus) the entire amount by which the amount of Working Capital set forth on the Certified Statement exceeds (or is less than) $4,732,000 (the level of Working Capital set forth in the preliminary statement of Working Capital included in Schedule 1.4) and (ii) minus the Escrow Amount.

(f) If the Purchaser and the Seller dispute any portion of the Closing Statement or the calculation of the Working Capital, but nonetheless agree that, following final determination of the Certified Statement, a payment will be required to be made pursuant to this Section 1.4 by the Seller to the Purchaser or by the Purchaser to the Seller, the amount of such payment that the parties do not dispute shall be paid.

1.5 Credits and Prorations. The Seller and the Purchaser shall prorate all Prepaids, including any payments due or advanced under any lease as of the Initial Closing Date. With respect to any amounts that have not yet been billed or otherwise determined, the Seller and the Purchaser shall prorate such amounts based on the most recent ascertainable bill, based on when Prepaids and other assessments are due and payable. The Prepaids and such prorations shall not be included in the calculation of Working Capital.

1.6 Payments and Computations. All payments under this Agreement shall be made in U.S. dollars. Except for the payments due at the Initial Closing or the China Closing, as applicable, each party shall make any payment due to the other party to this Agreement not later than 5:00 p.m., New York City time, on the day when due. All payments shall be made by wire transfer in immediately available funds to the account or accounts designated in writing by the party receiving such payment, together with interest, as provided below. All computations of interest shall be made on the basis of a year of 360 days, in each case for the actual number of days elapsed (beginning on the Initial Closing Date, and in the case of payments made pursuant to Section 1.4(d), up to but excluding the date on which payment is received, and otherwise, including the date on which payment is received). Whenever any payment under this Agreement shall be due on a day other than a business day, such payment shall be made on the next succeeding business day, and such extension of time shall be included in the computation of payment of interest. Any payment as an adjustment to the Purchase Price pursuant to Section 1.4 shall be made within three business days of the date the Certified Statement, together with interest thereon from the Initial Closing Date to the date the payment is made in full at the London Interbank Offered Rate (LIBOR) as reported on the Initial Closing Date in the Wall Street Journal for three calendar months, plus 3.0%.

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ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE SELLER

WITH RESPECT TO INTERCONNECT AND THE BUSINESS

Except as specifically set forth on the disclosure schedule attached as Exhibit B (the Disclosure Schedule) (such specific exceptions to include specific references to particular numbered representations and warranties contained in this Agreement), the Seller represents and warrants to the Purchaser that the statements set forth in this Article 2 are true and complete as of the date of this Agreement.

2.1 Corporate Organization. Interconnect is a company duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to conduct business under the laws of each jurisdiction listed in Section 2.1 of the Disclosure Schedule, which includes all jurisdictions where such qualification is required, except where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect. Interconnect has all corporate power and authority it needs to carry on its operations as currently conducted and to own, lease or operate its assets. Interconnect has no direct or indirect equity ownership in any Business Entity.

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