Exhibit 2.1

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “Agreement”) is made and entered into as of this 23rd day of June, 2004 (the “Execution Date”) by and between August Technology Corporation, a Minnesota Corporation (“Buyer”) and Inspex Inc., a Massachusetts corporation, as Debtor and Debtor-in-Possession (“Seller”) under Case No. 03-467-14 HJB (the “Case”) in the United States Bankruptcy Court for the District of Massachusetts (the “Bankruptcy Court”).

RECITALS

A.                                    Seller is engaged in the manufacture, distribution and marketing of software products sold under the mark DMSVISION (“DMSVision Software”) and, separately, of certain other businesses including but not limited to wafer inspection systems consisting of both hardware and software to the worldwide semiconductor manufacturing market (the “Other Business”).

B.                                      Hamamatsu Photonics K.K. (“Hamamatsu”) is the sole shareholder of Photonics Management Corporation, which in turn is the sole shareholder of Seller.

C.                                      On November 21, 2003, Seller filed a voluntary petition for Chapter 11 reorganization with the United States Bankruptcy Court for the District of Massachusetts.

C.                                      Seller wishes to sell to Buyer pursuant to Section 363 of the U.S. Bankruptcy Code certain of the assets it uses in connection with the DMSVision Software at the price and on the other terms and conditions specified in detail below, and Buyer wishes to so purchase and acquire such assets from Seller.  Seller is not selling to Buyer the Other Business.

NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.                Transfer of Assets .

1.1          Purchase and Sale of Assets .  On the Closing Date, as hereinafter defined, in consideration of the covenants, representations and obligations of Buyer hereunder, and subject to the conditions hereinafter set forth, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller’s right, title and interest as of the Closing Date in and to the Assets.  For purposes of this Agreement, the term “Assets” means all of the following owned by Seller as of the Closing:

(i)                                      Seller’s DMSVision Software, including all supporting modules such as Review Client, Spatial Pattern Recognition, Statistical Process Control and Parametrics and High Performance Bitmap, and related software, source code, development environments, tools, data base designs, design documentation, algorithms, user interface designs, compile and build scripts, architecture, libraries, objects and documentation and underlying intellectual property including copyrights and trade secrets embodied therein;

(ii)                                   All of Seller’s transferable Intellectual Property, as defined herein, related to or useful in connection with the DMSVision Software (including the trademark “DMSVISION” but excluding the trademark “INSPEX”) listed on Schedule 1.1(ii) to

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this Agreement (collectively, the “Intellectual Property Rights”).  “Intellectual Property” shall mean patents, copyrights, trademarks, tradenames, know-how, trade secrets, designs, inventions, discoveries, software, mask works, prototypes, algorithms, methods, and other intellectual property, applications for any of the foregoing, infringement or similar claims against third parties related to any of the foregoing and goodwill associated with any of the foregoing.

(iii)                                Seller’s right, title and interest in all Intellectual Property set forth on Schedule 1.1(iii) to this Agreement (the “R&D Property”) developed pursuant to certain research and development agreements between Seller and Hamamatsu;

(iv)                               Seller’s transferable right, title and interest (i) as lessee under those equipment, personal property and intangible property leases, rental agreements, licenses , contracts, agreements and similar arrangements described on Schedule 1.1(iv) to this Agreement (collectively, the “Leases”), and (ii) as a party to those other contracts, leases, orders, purchase orders, licenses (including licenses to third party software used in the DMSVision Software business), warranties, contracts, agreements and similar arrangements described on Schedule 1.1(iv) (collectively, the “Contracts” and, together with the Leases, the “Leases and Contracts”);

(v)                                  Copies of the books and records of Seller relating to the business of producing, distributing and marketing the DMSVision Software, including without limitation the books of account, tax, general, financial, accounting and personnel records, files, invoices, customer (current and prospective) and supplier lists, business plans, marketing studies and other written information; provided, however, that Seller shall retain or have access to such of the books and records as are necessary (A) to prepare financial statements for the fiscal year to end September 30, 2004 or any other periods ending after September 30, 2003, or to conduct the Other Business before or after the Closing; (B) to respond to tax or regulatory audits relating to periods prior to the Closing, which occur after the Closing; or (C) to prosecute any claims retained by Seller under subparagraph (vi) below;

(vi)                               all claims, rights and causes of action relating to the DMSVision Software but specifically excluding any Federal or state tax refund claims and all rights and powers of a trustee and debtor-in-possession against any person whatsoever, including all avoidance powers granted to Seller under the Bankruptcy Code and all causes of action and remedies granted pursuant to or incorporated in Sections 502, 510, 541(a)(3) and (4), 544, 545, 547 through 551 and 553 of the Bankruptcy Code; and

(vii)                            computer hardware, including servers and personal computers, used in the development, support or maintenance of the DMSVision Software, and office furniture and equipment, including desks, chairs and conference tables used by employees of Seller whose primary duties relate to the development, support or maintenance of the DMSVision Software listed on Schedule 1.1(vii) .

1.2          Instruments of Transfer .  The sale, assignment, transfer, conveyance and delivery of the Assets to Buyer and the assumption of obligations under the Leases and Contracts provided herein by Buyer shall be made by assignments, bills of sale and other instruments of assignment, transfer and conveyance provided for in Section 3 below and such other instruments as may

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reasonably be requested by Buyer or Seller.  None of the foregoing documents shall increase in any material way the burdens imposed by this Agreement upon Seller or Buyer.

2.                Consideration .

2.1          Purchase Price .

2.1.1                         The cash consideration to be paid by Buyer to Seller for the Assets (the “Purchase Price”) shall be Two Million One Hundred Thousand and No/100 Dollars ($2,100,000.00) (the “Closing Payment”) in immediately available, good funds (funds delivered in this manner are referred to herein as “Good Funds”), and subsequently as additional consideration, (a) Twenty percent (20%) of the revenues received from new DMSVision Software license agreements Buyer enters into during the twelve-month period following the Closing Date, and (b) if the DMSVision Software is not licensed to a third party separately, but as part of a combination product, Ten percent (10%) of the partial net sales received by Buyer under new agreements entered into during the twelve-month period following the Closing Date for such combination products, such partial net sales being equal to the product of the net sales for such combination products under the agreements in question, multiplied by the ratio of the fair market value of the DMSVision Software license included in the combination product to the net sales price of the combination product in its entirety. (the “Royalty Payment”).  “Revenues received from new DMSVision Software license agreements” as used in the preceding sentence shall mean (a) gross revenues actually received by Buyer pursuant to the license agreements entered into during the twelve months following the Closing Date (b) less (i) sales, value added and/or use taxes, (ii) duties and similar governmental assessments paid and (iii) amounts allowed or credited due to rejections and/or returns.  “Net sales” as used in the second preceding sentence shall mean (a) the gross revenue actually received by Buyer pursuant to agreements for the sale of combination products entered into during the twelve months following the Closing Date (b) less (i) sales, value added and/or use taxes, (ii) duties and similar governmental assessments paid, (iii) shipping, and (iv) amounts allowed or credited due to rejections and/or returns.

2.1.2                         Upon delivery of this Agreement, signed by Buyer, to Sellers, an earnest money deposit (the “ Deposit ”) in the amount of ten percent (10%) of the Closing Payment shall be paid by Buyer into escrow to be held by Seller’s counsel, Looney & Grossman LLP, by wire transfer in immediately available funds.  The Deposit shall be applied to the Closing Payment payable by Buyer on the Closing Date.  If this Agreement shall be terminated by any party hereto pursuant to Sections 3.2 or 4.3 hereof, or in the event that a person other than Buyer is approved by the Bankruptcy Court as the successful bidder of all or any portion of the Assets, then the Deposit shall be returned to Buyer.

2.1.3                         On the Closing Date, Buyer shall pay and deliver to Seller, by wire transfer in Good Funds, the balance of the Closing Payment.  Within 45 days following the end of each calendar quarter occurring after the Closing Date, Buyer shall pay and deliver to Seller, by wire transfer in Good Funds, the Royalty Payment with respect to revenues received in such calendar quarter.  When all licenses of DMSVision Software entered into by Buyer during the twelve months following the Closing Date have terminated, and Buyer is entitled to no further receipts pursuant to such licenses or pursuant to any agreements for the sale of combination products, Buyer shall notify Seller, or Seller’s designee, in writing that Buyer’s obligation to make Royalty Payments has terminated.  With each Royalty Payment and the notice that Buyer is entitled to no further receipts, Buyer shall deliver to Seller an accounting supporting Buyer’s

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determination of the amount of such Royalty Payment and, in the case of the notice, the conclusion that Buyer is entitled to no further receipts.  Seller shall be entitled to have such accounting reviewed by its accountants and to object to the accuracy or content of such accounting.  Any such review shall be at the expense of Seller unless (i) such review identifies a discrepancy in Seller’s favor in an amount equal to 10% or more of the Royalty Payment that is the subject of such review, or, in the case of the notice, such review concludes that Buyer is entitled to additional receipts that result in additional Royalty Payments equal to 10% or more of the last Royalty Payment made by Buyer, and (ii) Buyer agrees with the conclusions of Seller’s review or becomes subject to a binding determination of a court, with no further opportunity for review or appeal, consistent with the conclusions of Seller’s review, in which case Buyer shall pay the expenses of the review.

2.2          Assumed Liabilities . Buyer shall, effective as of the Closing Date, assume and perform all liabilities accruing under the Leases and Contracts on and after the Closing Date.  A tentative list of such Leases and Contracts (together with a summary of the related liabilities, payment schedules, warranty obligations, accrued people/day credits owed to customers, etc. (the “Assumed Liabilities”) associated with each), is attached as Schedule 1.1(iv) hereto.  Immediately prior to the Closing Date, Seller shall provide to Buyer an updated Schedule 1.1(iv) along with supporting documentation setting forth the Assumed Liabilities current as of the business day preceding the Closing Date.  If Buyer elects to have other agreements assumed and assigned to it which are not set forth on that Schedule (“Discretionary Agreements”) and does not change that election before Closing, Buyer shall pay the cure costs for such Discretionary Agreements.  Other than the liabilities and obligations of Seller expressly assumed by Buyer hereunder (the “Assumed Obligations”), Buyer is not assuming and shall not be liable for any liabilities or obligations of Seller, and Seller shall be obligated to pay cure costs as required by the Bankruptcy Code.

3.                Closing Transactions .

3.1          Closing .  The Closing of the transactions provided for herein (the “Closing”) shall take place at the offices of Seller’s counsel or such other location upon which the parties may mutually agree.

3.2          Closing Date .  The Closing shall be held within five days after satisfaction or waiver of the conditions to Closing in Section 4 (the “Closing Date”) but in no event later than August 31, 2004 (the “Outside Date”).  In the event the conditions to Closing have not been satisfied or waived by the Outside Date, then any party who is not in default hereunder may terminate this Agreement.  Alternatively, the parties may mutually agree to an extended Closing Date. Until this Agreement is either terminated or the parties have agreed upon an extended Closing Date, the parties shall diligently continue to work to satisfy all conditions to Closing.

3.3          Seller’s Deliveries to Buyer at Closing .  On the Closing Date, Seller shall make the following deliveries to Buyer:

3.3.1                         An Assignment and Assumption Agreement substantially in the form and content attached as Exhibit A hereto, duly executed by Seller, pursuant to which Seller assigns the Leases and Contracts (the “Assignment Agreement”).

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3.3.2                         A bill of sale, duly executed by Seller, in the form and on the terms of the bill of sale attached hereto as Exhibit B, pursuant to which Seller transfers the Assets other than the Leases and Contracts to Buyer (the “Bill of Sale”).

3.3.3                         Assignments of the Intellectual Property Rights in a form satisfactory to Buyer.

3.4          Buyer’s Deliveries to Seller at Closing .  On the Closing Date, Buyer shall make or cause to be made the following deliveries to Seller:

3.4.1                         That portion of the Purchase Price to be delivered by Buyer directly to Seller at the Closing under Section 2.1 and payments under Section 3.5.

3.4.2                         The Assignment Agreement, duly executed by Buyer.

3.4.3                         A license agreement by and between Buyer and Hamamatsu, substantially in the form and content attached hereto as Exhibit C , and a license agreement by and between Buyer and Seller, substantially in the form and content attached hereto as Exhibit D, pursuant to which Buyer shall grant to Hamamatsu and Seller:

1)                                       a perpetual, irrevocable, royalty-free, non-exclusive worldwide license in all of the pertinent intellectual property rights conveyed to Buyer hereunder to make, use, sell, modify, import, copy, prepare derivative works and otherwise commercialize (i) the DMSVision Software currently implemented in Hamamatsu’s products, including source code in the possession of Hamamatsu, and (ii) the R&D Property, in connection with Hamamatsu’s products and any improvements to, or new versions of, such products, provided that such products, improvements or versions are used only in the field of Back-End Semiconductor Failure Analysis of integrated circuits and wafers using Photo Emission or Photo Stimulation methods, including but not limited to Emission Microscopy, OBIRCH (Optical Beam Induced Resistance Change), SDL (Soft Defect Localization) and PICA (Picosecond Imaging Circuit Analysis).

2)                                       a perpetual, irrevocable, royalty-free, non-exclusive (except as provided in the last sentence of this paragraph) worldwide license in all of the pertinent intellectual property rights conveyed to Buyer hereunder to make, use, sell, modify, import, copy, prepare derivative works and otherwise commercialize the current version of DMSVision and predecessor versions and the R&D Property, in applications other than semiconductor applications.  Semiconductor applications shall be defined to include advanced package semiconductors, MEMS, microelectronics, data storage, microfluidics and optoelectronics, including LEDs and flat panel displays and inspection of all of these.  In addition, the license referred to in the first sentence of this paragraph shall be exclusive as to certain specialty medical, biological and pharmaceutical fields in which Hamamatsu is conducting research and development (or has done so within the last 12 months), to be defined in the license, and Buyer shall cooperate to the extent reasonably required for Hamamatsu to secure the benefit of such exclusive rights, any such cooperation to be at Hamamatsu’s expense.

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3.5          Prorations .  Any items of expense (including, without limitation, any prepaid amounts under the Leases and Contracts, or any of them) relating to or attributable to the Assets and/or the Leases and Contracts shall be prorated between Seller and Buyer as of the Closing Date.  All obligations due in respect of periods prior to Closing shall be paid in full or otherwise satisfied by Seller and all obligations due in respect of periods after Closing shall be paid in full or otherwise satisfied by Buyer.  On or prior to the Closing Date, Seller shall pay to each of its employees who will be employed by Buyer following the Closing Date all employment related obligations including salary, bonus, benefits, accrued vacation, etc., due for periods prior to the Closing Date and satisfy any and all payroll tax obligations with respect to such employees.  Buyer shall pay to Seller in cash on the Closing Date the amount of the security or similar deposits with contracting parties under the Leases and Contracts and the amount of any other deposits or prepaid expenses made by Seller relating to the property to which the Leases and Contracts relate in the amounts set forth on Schedule 3.5 attached hereto as adjusted on the Closing Date to reflect the amount of such prepaid expenses accruing to the benefit of Buyer.

3.6          Sales, Use and Other Taxes .  Any sales, purchases, transfer, stamp, documentary stamp, use or similar taxes that may be payable by reason of the sale of the Assets under this Agreement or the transactions contemplated herein shall be paid by Seller if not determined to be exempt under Section 1146(c) of the Bankruptcy Code; provided, however, that Buyer shall pay any costs or fees associated with transfer of the intellectual property described in Section 5.7 hereof to the extent determined not to be exempt under Section 1146(c) of the Bankruptcy Code.

3.7          . Possession .  The right to possession of the Assets shall transfer to Buyer on the Closing Date.  Seller shall transfer and deliver to Buyer on the Closing Date such keys, lock and safe combinations and other similar items as Buyer shall require to obtain immediate and full occupation and control of the Assets, and shall also make available to Buyer at its then existing locations the originals of all documents in Seller’s possession that are required to be transferred to Buyer by this Agreement.  Buyer shall maintain the confidentiality of information relating to the Other Business.

4.                Conditions Precedent to Closing .

4.1          Conditions to Seller’s Obligations .  Seller’s obligation to make the deliveries required of Seller at the Closing Date shall be subject to the satisfaction or waiver by Seller of each of the following conditions.

4.1.1                         All of the representations and warranties of Buyer contained herein shall continue to be true and correct at the Closing in all material respects, all covenants and obligations to be performed by Buyer prior to the Closing shall have been performed in all material respects, and Buyer shall have certified the foregoing to Seller in writing.

4.1.2                         Buyer shall have delivered to Seller appropriate evidence of all necessary action by Buyer in connection with the transactions contemplated hereby, including, without limitation:  (i) certified copies of resolutions duly adopted by Buyer’s governing body approving the transactions contemplated by this Agreement and authorizing the execution, delivery and performance by Buyer of this Agreement; (ii) a certificate as to the incumbency of officers or other authorized agents of Buyer executing this Agreement and any instrument or other document delivered in connection with the transactions contemplated by this Agreement and (iii)

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a legal opinion of Buyer’s legal counsel regarding due authorization of the transactions contemplated hereby and such other matters as may be reasonably requested by Seller.

4.1.3                         Buyer shall have executed and delivered to Seller and Hamamatsu the license agreements between Buyer, Seller and Hamamatsu substantially in the form and content attached as Exhibits C and D hereto.

4.1.4                         No action, suit or other proceedings shall be pending before any court, tribunal or governmental authority seeking or threatening to restrain or prohibit the consummation of the transactions contemplated by this Agreement, or seeking to obtain substantial damages in respect thereof, or involving a claim that consummation thereof would result in the violation of any law, decree or regulation of any governmental authority having appropriate jurisdiction.

4.1.5                         The Bankruptcy Court shall have entered the Procedure Order in accordance with Section 8.4.1 below and the Approval Order as contemplated by and defined in Section 8.4.2 below, and the Approval Order shall not have been stayed as of the Closing Date.

4.2          Conditions to Buyer’s Obligations .  Buyer’s obligation to make the deliveries required of Buyer at the Closing shall be subject to the satisfaction or waiver by Buyer of each of the following conditions:

4.2.1                         All representations and warranties of Seller contained herein shall continue to be true and correct at the Closing in all material respects, all covenants and obligations to be performed by Seller prior to the Closing shall have been performed in all material respects, and Seller shall have certified the foregoing to Buyer in writing.

4.2.2                         Seller shall have delivered to Buyer appropriate evidence of all necessary action by Seller in connection with the transactions contemplated hereby, including, without limitation:  (i) certified copies of resolutions duly adopted by governing body of Seller approving the transactions contemplated by this Agreement and authorizing the execution, delivery and performance by Seller of this Agreement; (ii) a certificate as to the incumbency of officers or other authorized agents of Seller executing this Agreement and any instrument or other document delivered in connection with the transactions contemplated by this Agreement and (iii) a legal opinion of legal counsel to Seller regarding due authorization of the transactions contemplated hereby and such other matters as may be reasonably requested by Buyer.

4.2.3                         Seller shall have executed and delivered to Buyer the Assignment Agreement, the Bill of Sale and each other document reasonably requested by Buyer pursuant to Sections 1.2 and 3.3.

4.2.4                         Photonics Management Corporation shall have executed and delivered to Buyer a lease agreement, substantially in the form attached hereto as Exhibit E , pursuant to which Photonics Management Corporation) leases to Buyer for six (6) months from the Closing Date, for no consideration other than as set forth in the last sentence of this paragraph, sufficient space in Seller’s facility to accommodate those of Seller’s employees that Buyer elects to employ subsequent to the Closing Date, in working space substantially equivalent to that occupied by such employees as of the Execution Date, permitting such employees to use telephone equipment and computer network access to the same extent as available prior to the Closing Date but in a manner which does not interfere with the conduct or confidentiality of the Other Business. Such

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lease agreement shall require Buyer to reimburse Photonics Management Corporation or its successors or assigns for its proportionate share of operating expenses, utilities and common area charges associated with the Seller’s facility.

4.2.5                         Hamamatsu shall have executed and delivered to Buyer an assignment of Hamamatsu’s right, title and interest in the R&D Property in the form attached hereto as Exhibit F .

4.2.6                         No action, suit or other proceeding shall be pending before any court, tribunal or governmental authority seeking or threatening to restrain or prohibit the consummation of the transactions contemplated by this Agreement, or seeking to obtain substantial damages in respect thereof, or involving a claim that consummation thereof would result in the violation of any law, decree or regulation of any governmental authority having appropriate jurisdiction.

4.2.7                         The Bankruptcy Court shall have entered the Procedure Order substantially in the form attached as Exhibit G in accordance with Section 8.4.1 below by July 31, 2004 and the Final Approval Order substantially in the form attached as Exhibit H in accordance with Section 8.4.2 below.  If an Approval Order substantially in the form attached as Exhibit H is entered, Buyer may waive the requirement that it be a Final Approval Order.

4.2.8                         There shall not have occurred a material casualty of any nature with respect to the Seller’s DMSVision Software business, Seller shall not have a material diminution in its customer base, employees or prospects at its Massachusetts facility nor shall any material adverse change of comparable significance have occurred or be reasonably likely to occur in the DMSVision Software business or its prospects.  The foregoing shall not include the taking of any action contemplated by this Agreement and the other agreements contemplated hereby, or any existing event, occurrence, or circumstance with respect to which Buyer has knowledge as of the Execution Date.

4.2.9                         All authorizations, consents, filings and approvals necessary to permit Seller to perform the transactions contemplated hereby shall have been duly obtained, made or given, shall be in form and substance reasonably acceptable to Buyer, shall not be subject to the satisfaction of any condition that has not been satisfied or waived and shall be in full force and effect.  All terminations or expirations of waiting periods imposed by any governmental authority necessary for the transaction contemplated under this Agreement, if any, shall have occurred.  Seller shall use commercially reasonable efforts to seek such authorization, consent, filings or approvals and, where appropriate, Buyer at no