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ASSET PURCHASE AGREEMENT
 
BY AND BETWEEN
 
INTERNATIONAL RECTIFIER CORPORATION
 
AND
 
APA ENTERPRISES, INC.
 
________________
 
Dated as of March 9, 2006
 

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TABLE OF CONTENTS
 

   
Page
     
SECTION 1.
PURCHASE AND SALE OF ASSETS
1
1.1
  Purchase and Sale of Assets.
1
1.2
  Purchase Price
2
1.3
  Allocation of Purchase Price
2
SECTION 2
ADDITIONAL AGREEMENTS
2
SECTION 3.
CLOSING
2
3.1
  Closing Date.
2
3.2
  Purchaser's Closing Date Deliveries
2
3.3
  Seller's Closing Date Deliveries
3
3.4
  Further Assurances
3
SECTION 4.
REPRESENTATIONS AND WARRANTIES OF SELLER
3
4.1
  Organization of Seller
3
4.2
  Authority of Seller.
3
4.3
  No Violation of Law and Agreements
4
4.4
  Assets
4
4.5
  No Litigation or Regulatory Action
5
4.6
  Taxes
5
4.7
  Permits.
5
4.8
  Environmental Compliance.
5
4.9
  No Brokers
6
SECTION 5.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
6
5.1
  Organization of Purchaser
6
5.2
  Authority of Purchaser
6

 
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5.3
  No Violation of Law and Agreements
6
5.4
  No Litigation or Regulatory Action.
7
5.5
  No Brokers
7
5.6
  Financial Ability
7
SECTION 6.
ACTION PRIOR TO THE CLOSING DATE
7
6.1
  Regulatory and Other Approvals
7
6.2
  Investigation by Purchaser
7
6.3
  Veeco Lease.
7
6.4
  Designated Employees.
7
6.5
  Reasonable Efforts
8
SECTION 7.
EMPLOYEES
8
7.1
  Offer of Employment
8
7.2
  No Third Party Beneficiaries.
8
SECTION 8.
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
8
8.1
  No Misrepresentation or Breach of Covenants and Warranties
8
8.2
  Necessary Governmental Approvals
8
8.3
  Deliveries by Seller
8
8.4
  No Injunction
9
8.5
  Employees.
9
SECTION 9.
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
9
9.1
  No Misrepresentation or Breach of Covenants and Warranties
9
9.2
  Necessary Governmental Approvals
9
9.3
  Payment of Purchase Price
9
9.4
  Delivery by Purchaser
9
9.5
  No Injunction
9

 
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SECTION 10
TERMINATION
9
10.1
  Termination
9
10.2
  Effect of Termination
10
SECTION 11.
SURVIVAL AND INDEMNIFICATION
10
11.1
  Survival of Covenants, Representations and Warranties
10
11.2
  Indemnification By Seller
10
11.3
  Indemnification by Purchaser
10
11.4
  Notice of Claims.
10
11.5
  Mitigation.
11
11.6
  Subrogation.
11
11.7
  Warranty
11
SECTION 12.
GENERAL PROVISIONS
11
12.1
  Notices
11
12.2
  Expenses
11
12.3
  Confidentiality
12
12.4
  Waiver
12
12.5
  Amendment
12
12.6
  No Third Party Beneficiary
12
12.7
  No Assignment; Binding Effect
12
12.8
  Headings
13
12.9
  Invalid Provisions
13
12.10
  Governing Law
13
12.11
  Jurisdiction; Waiver of Jury Trial
13
12.12
  Counterparts
13
12.13
  Interpretation.
13
12.14
  Entire Agreement
13
12.15
  Circular 230 Disclaimer
13

 
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EXHIBITS
 
Exhibit A
 
Certain Definitions
Exhibit B
 
Patent and Technology License Agreement
Exhibit C
 
Consulting Agreement
Exhibit D
 
Bill of Sale

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SCHEDULES
 
Schedule 1.1(a)(i)
 
D180
Schedule 1.1(a)(ii)
 
Spare Parts
Schedule 1.1(a)(iii)
 
Consumables
Schedule 1.1(a)(iv)
 
Equipment
Schedule 1.1(a)(v)
 
GaN Intellectual Property
Schedule 4.3
 
Permitted Liens
Schedule 4.4
 
Assets
Schedule 4.5
 
Litigation or Regulatory Action
Schedule 4.7
 
Permits
Schedule 4.9
 
Benefit Plans for Designated Employees
Schedule 7.1
 
Designated Employees

 
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ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this "Agreement") is entered into as of March 9th
2006, by and between International Rectifier Corporation, a Delaware corporation
("IR" or "Purchaser") and APA Enterprises, Inc., a Minnesota corporation ("APA"
or "Seller"). (Purchaser and Seller may each be referred to herein as a "Party"
and collectively as the "Parties." Capitalized terms have the meanings set forth
in Exhibit A attached hereto.)

W I T N E S S E T H:

WHEREAS, Seller owns an Emcore D180 GaN MOCVD growth tool and related assets,
including without limitation certain intellectual property, which it uses in the
development and production of products utilizing Gallium Nitride ("GaN"); and

WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase
from Seller, said growth tool and related assets described herein on the terms
and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, it is hereby agreed as follows:

SECTION 1.   PURCHASE AND SALE OF ASSETS

1.1   Purchase and Sale of Assets.

(a)   Upon the terms and subject to the conditions of this Agreement, on the
Closing Date, Purchaser shall purchase from Seller, and Seller shall irrevocably
sell, convey, transfer, assign and deliver to Purchaser, free and clear of all
Encumbrances, all of Seller's rights, title and interest in and to the following
assets, properties and rights, in each case to the extent existing as of the
Closing Date (the "Assets"):
 
(i)   The Emcore D180 GaN MOCVD growth tool described on Schedule 1.1(a)(i) (the
"D180"), presently installed at the facility of Veeco Compound Semiconductor
Inc. ("Veeco") located at 4900 Constellation Drive, St. Paul, Minnesota 55127;

(ii)    The spare parts for the D180 set forth on Schedule 1.1(a)(ii) (the
"Spare Parts");

(iii)   The consumable products intended for use with the D180 set forth on
Schedule 1.1(a)(iii) (the "Consumables");

(iv)   The related equipment set forth on Schedule 1.1(a)(iv) (the "Equipment");
and

(v)    The know-how, technical information, patents, patent applications,
disclosures and other Intellectual Property relating to GaN technology set forth
on Schedule 1.1(a)(v) (the "GaN Intellectual Property").

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(b)   Notwithstanding anything to the contrary herein, Seller shall not
contribute, convey, assign, or transfer to Purchaser, and Purchaser shall not
acquire or have any rights to acquire, any assets of Seller other than those
specifically set forth on the Schedules identified in Section 1.1(a).

1.2   Purchase Price. Purchaser shall pay Seller, and Seller shall accept, in
full payment for the Assets, at the Closing a purchase price of One Million and
Nine Hundred Thousand dollars ($1,900,000) (the "Purchase Price"). At Closing,
Purchaser shall pay the Purchase Price to Seller by means of a wire transfer of
immediately available U.S. funds to one or more accounts designated in advance
in writing by Seller to Purchaser.

1.3   Allocation of Purchase Price. The consideration for the Assets as
determined for federal income tax purposes shall be allocated as provided in
Treasury Regulation Section 1.1060-1(c).

SECTION 2.   ADDITIONAL AGREEMENTS

2.1   Prior to or at the Closing, Purchaser and Seller shall enter into a patent
and technology license agreement, substantially in the form of Exhibit B (the
"Patent and Technology License Agreement"), pursuant to which Purchaser shall
grant Seller a license to use certain of the GaN Intellectual Property in
applications greater than 1.0 GHz.

2.2   Prior to or at the Closing, Purchaser and Seller shall enter into a
consulting agreement, substantially in the form of Exhibit C (the "Consulting
Agreement"), pursuant to which Seller shall provide certain support services to
Purchaser.

SECTION 3.   CLOSING

3.1   Closing Date. The Closing shall be consummated on a date and at a time
agreed upon by Purchaser and Seller, but in no event later than the fifth (5th)
Business Day after the conditions set forth in Sections 8 and 9 have been
satisfied or waived, at the offices of International Rectifier Corporation, 233
Kansas Street, El Segundo, CA, 90245, or at such other place as shall be agreed
upon by Purchaser and Seller. The time and date on which the Closing is actually
held is referred to herein as the "Closing Date."

3.2   Purchaser's Closing Date Deliveries. Subject to fulfillment or waiver of
the conditions set forth in Section 8, at the Closing, Purchaser shall deliver
to Seller all of the following:

(a)   The Purchase Price, payable as provided in Section 1.2;

(b)   The Patent and Technology License Agreement, executed by a duly authorized
officer of Purchaser;

(c)   The Consulting Agreement, executed by a duly authorized officer of
Purchaser; and
 
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(d)   Such other instruments and documents as Seller may reasonably deem
necessary or as may be required to consummate the transactions contemplated
hereby.

3.3   Seller's Closing Date Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Section 9, at the Closing, Seller shall deliver to
Purchaser all of the following:

(a)   A Bill of Sale, substantially in the form of Exhibit D, executed by a duly
authorized officer of Seller;

(b)   The Patent and Technology License Agreement, executed by a duly authorized
officer of Seller;

(c)   The Consulting Agreement, executed by a duly authorized officer of Seller;

(d)   All other instruments, certificates, documents and filings (if applicable)
necessary to provide Purchaser full ownership of the Assets; and

(e)   Such other instruments and documents as Purchaser may reasonably deem
necessary or as may be required to consummate the transactions contemplated
hereby.

3.4   Further Assurances. Subject to the terms and conditions of this Agreement,
from time to time after the Closing, each of the Parties shall execute and
deliver such other documents and instruments, provide such materials and
information, and take such other actions as may be reasonably necessary, to the
extent permitted by Law, to fulfill its obligations under this Agreement.

SECTION 4.   REPRESENTATIONS AND WARRANTIES OF SELLER

As an inducement to Purchaser to enter into this Agreement and to consummate the
transactions contemplated hereby, Seller hereby represents and warrants to
Purchaser as set forth below.

4.1   Organization of Seller. Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of Minnesota. Seller has the
corporate power and authority to own and operate the Assets in the manner
conducted immediately prior to the date of this Agreement.

4.2   Authority of Seller. Seller has the corporate power and authority to
execute, deliver and perform this Agreement and the Transaction Agreements. The
execution, delivery and performance of this Agreement and the Transaction
Agreements by Seller have been duly authorized and approved by all necessary
corporate action. This Agreement has been duly authorized, executed and
delivered by Seller and (assuming the valid authorization, execution and
delivery of this Agreement by Purchaser) is the legal, valid and binding
obligation of Seller, enforceable in accordance with its terms, and each of the
Transaction Agreements has been duly authorized by Seller and upon execution and
delivery by Seller (assuming the valid authorization, execution and delivery by
each other party thereto) will be the legal, valid and binding obligation of
Seller enforceable in accordance with its terms, in each case subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting creditors' rights and to general equity
principles.
 
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4.3   No Violation of Law and Agreements. The execution and delivery by Seller
of this Agreement and each Transaction Agreement, and the performance by Seller
of its obligations hereunder or thereunder, does not and will not:

(a)   Violate any provisions of the certificate of incorporation or bylaws of
Seller;

(b)   Violate any provision of applicable Law relating to Seller;

(c)   Except as set forth on Schedule 4.3, require a registration, filing,
application, notice, consent, approval, order, qualification, authorization,
designation, declaration or waiver with, to or from any Governmental Authority;
or

(d)   Except as set forth on Schedule 4.3, (i) require a consent, approval or
waiver from, or notice to, any party to any material contract to which Seller is
a party, or (ii) result in a material breach of, constitute a default under,
result in the acceleration of material obligations, loss of material benefit or
increase in any material Liabilities or fees under, or create in any party the
right to terminate, cancel or materially modify, any agreement to which Seller
is a party.

4.4   Assets. Seller owns, is in possession of, and has good and valid title to
all of the Assets. All Assets are free and clear of all Liens, other than Liens
disclosed in Schedule 4.4 ("Permitted Liens").

(a)   The D180 and all Equipment are in all material respects in good working
order and condition, ordinary wear and tear excepted. The D180 has been
installed on the Veeco premises in compliance with all applicable Laws and at
all times has been operated in compliance with all applicable laws.

(b)   All of the Spare Parts and Consumables are new and unused and consist of a
quality and quantity usable in the ordinary course of business consistent with
past practices.

(c)   Seller owns the entire right, title and interest in and to the GaN
Intellectual Property, free and clear or all Encumbrances. To the Knowledge of
Seller, none of the GaN Intellectual Property infringes or violates, or
constitutes a misuse or misappropriation of, any intellectual property rights of
any Person or entity. Other than as set forth on Schedule 4.4, Seller has not
granted rights to use any GaN Intellectual Property to any other Person. To the
Knowledge of Seller, during the previous two (2) years no material Action has
been taken or threatened, (A) alleging that any GaN Intellectual Property
infringes on the intellectual property of another Person; or (B) challenging the
ownership or validity of the GaN Intellectual Property. No Action is pending
with respect to any GaN Intellectual Property and, to the Knowledge of Seller,
there is no valid basis for any such Action.
 
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(d)   Except as set forth on Schedule 4.4, there is no Action or Proceeding
pending or, to the Knowledge of Seller, threatened, (a) which would delay the
consummation of any of the transactions contemplated hereby; or (b) that
questions the legality or propriety of the transactions contemplated by this
Agreement or any of the Transaction Agreements.

4.5   No Litigation or Regulatory Action. Except as set forth on Schedule 4.5:

(a)   There is no Action or Proceeding pending or, to the Knowledge of Seller,
threatened, against Seller which would reasonably be expected to prevent, or
materially hinder or delay the consummation of any of the transactions
contemplated hereby; and

(b)   There is no Action or Proceeding pending or, to the Knowledge of Seller,
threatened, that questions the legality or propriety of the transactions
contemplated by this Agreement or any of the Transaction Agreements.

4.6   Taxes. None of the Assets is subject to any lien in favor of the United
States pursuant to Section 6321 of the Code for nonpayment of federal Taxes, or
any lien in favor of any state or locality pursuant to any comparable provision
of state or local law, under which transferee liability might be imposed upon
Purchaser as a buyer of such Assets pursuant to Section 6323 of the Code or any
comparable provision of state or local law.

4.7   Permits. Schedule 4.7 sets forth all Permits owned, held or possessed by
Seller that are necessary to entitle it to own, operate and use the Assets
substantially as conducted on the date of this Agreement, except for such
Permits as to which the failure to so own, hold or possess would not result in a
Material Adverse Effect (herein collectively called "Governmental Permits").

4.8   Environmental Compliance.

(a)   In its use and operation of the Assets, Seller is and has been in
compliance with all applicable Environmental Laws.

(b)   Seller possesses all Permits required under Environmental Laws for use and
operation of the Assets except for such Permits that the failure to so hold or
possess would not result in a Material Adverse Effect.

(c)   To the Knowledge of Seller, there has been no release of any Hazardous
Substance in connection with the use or operation of the Assets that is in
violation of or is reasonably likely to lead to any Liability arising under any
Environmental Law.

(d)   Seller has not received any written notice of violation, nor is any Action
pending or, to the Knowledge of Seller, threatened, asserting actual or
potential Liability under any Environmental Law in respect of the use or
operation of the Assets.

(e)   All environmental studies and audits conducted in relation to the Assets
in the last two (2) years of which Seller has knowledge have been made available
to Purchaser.
 
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4.9   No Brokers. Except for the fees paid and payable by Seller to David
Reamer, neither Seller nor any Person acting on its behalf has paid or become
obligated to pay any fees or commission to any broker, finder or intermediary
for or on account of the transactions contemplated by this Agreement.

SECTION 5.   REPRESENTATIONS AND WARRANTIES OF PURCHASER

As an inducement to Seller to enter into this Agreement and to consummate the
transactions contemplated hereby, Purchaser hereby represents and warrants to
Seller as follows:

5.1   Organization of Purchaser. Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of Delaware. Purchaser has
the corporate power and authority to own or lease and operate its assets and to
carry on its businesses in the manner that they were conducted immediately prior
to the date of this Agreement.

5.2   Authority of Purchaser. Purchaser has the corporate power and authority to
execute, deliver and perform this Agreement and each of the Transaction
Agreements. The execution, delivery and performance of this Agreement and the
Transaction Agreements by Purchaser have been duly authorized and approved by
all necessary corporate action. This Agreement has been duly authorized,
executed and delivered by Purchaser and (assuming the valid authorization,
execution and delivery of this Agreement by Seller) is the legal, valid and
binding agreement of Purchaser, enforceable in accordance with its terms, and
each of the Transaction Agreements has been duly authorized by Purchaser and
upon execution and delivery by Purchaser (assuming the valid authorization,
execution and delivery by each other party thereto) will be the legal, valid and
binding obligation of Purchaser enforceable in accordance with its terms, in
each case subject to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general application relating to or affecting creditors' rights
and to general equity principles.

5.3   No Violation of Law and Agreements. The execution and delivery by
Purchaser of this Agreement and each Transaction Agreement, and the performance
by Purchaser of its obligations hereunder or thereunder, does not and will not:

(a)    Violate any provision of the certificate of incorporation or bylaws of
Purchaser;

(b)   Violate any provision of applicable Law relating to Purchaser;

(c)   Require a registration, filing, application, notice, consent, approval,
order, qualification, authorization, designation, declaration or waiver with, to
or from any Governmental Authority; or

(d)   (i) Require a consent, approval or waiver from, or notice to, any party to
any material contract to which Purchaser is a party, or (ii) result in a
material breach of, constitute a default under, result in the acceleration of
material obligations, loss of material benefit or increase in any material
Liabilities or fees under, or create in any party the right to terminate, cancel
or materially modify, any agreement to which Purchaser is a party.
 
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5.4   No Litigation or Regulatory Action.

(a)   There is no Action or Proceeding pending or, to the knowledge of
Purchaser, threatened, against Purchaser which would reasonably be expected to
prevent, or materially hinder or delay the consummation of any of the
transactions contemplated hereby; and

(b)   There is no Action or Proceeding pending or, to the knowledge of
Purchaser, threatened, that questions the legality or propriety of the
transactions contemplated by this Agreement or any of the Transaction
Agreements.

5.5   No Brokers. Neither Purchaser nor any Person acting on its behalf has paid
or become obligated to pay any fee or commission to any broker, finder or
intermediary for or on account of the transactions contemplated by this
Agreement.

5.6   Financial Ability. Purchaser has sufficient cash on hand from Purchaser's
immediately available internal funds and/or available credit facilities to
consummate the transactions contemplated by this Agreement and perform its
obligations hereunder.

SECTION 6.   ACTION PRIOR TO THE CLOSING DATE

Purchaser and Seller covenant and agree to take the following actions between
the date hereof and the Closing Date:

6.1   Regulatory and Other Approvals. Each Party will as promptly as practicable
(a) take all commercially reasonable steps necessary or desirable to obtain all
consents or approvals of, make all filings with and give all notices to
Governmental Authorities or any other Person required to consummate the
transactions contemplated hereby, and (b) provide such other information to such
Governmental Authorities or other Persons as such Governmental Authorities or
other Persons may reasonably request in connection therewith.

6.2    Investigation by Purchaser. Seller will (a) provide Purchaser and its
directors, officers, employees, counsel, accountants, financial advisors,
consultants and other representatives (collectively, "Representatives") with
reasonable access, upon reasonable prior notice and during normal business
hours, to the Assets and any relevant supporting facilities, but only to the
extent that such access does not unreasonably interfere with the business and
operations of Seller, and (b) promptly furnish Purchaser and such
Representatives with all such information and data concerning the Assets as
Purchaser or any of such Representatives reasonably may request in connection
with such investigation, except to the extent that furnishing any such
information or data would violate any Law, Order, Contract or License applicable
to Seller.

6.3   Veeco Lease. The Parties will use reasonable commercial efforts to cause
Veeco (a) to terminate its lease with Seller, dated June 11, 2004, on terms and
conditions satisfactory to Seller; and (b) to enter into a substitute lease with
Purchaser on terms and conditions satisfactory to Purchaser.

6.4   Designated Employees. Seller shall use reasonable commercial efforts to
cause the Designated Employees to accept employment with Purchaser following the
Closing.
 
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6.5   Reasonable Efforts. Subject to the terms and conditions of this Agreement,
each Party will use all reasonable efforts to cause the Closing to occur
(including, without limitation, the use of commercially reasonable efforts to
execute and deliver any documents reasonably requested by either Party and to
satisfy such Party's conditions to Closing set forth herein). Each Party will
promptly notify the other after learning of the occurrence of any event or
circumstance which would reasonably be expected to cause any condition to
Closing not to be satisfied. In such event, the Parties will negotiate in good
faith during the seven (7) day period immediately after such notice to determine
the consequences of such circumstance, and Seller or Buyer, as applicable, may
elect to terminate this Agreement after the expiration of such seven (7) day
period, which termination will be subject to Section 10.1 below.

SECTION 7.   EMPLOYEES

7.1   Offer of Employment. Purchaser shall offer employment as of the Closing
Date to each of the employees identified on Schedule 7.1 (the "Designated
Employees"), attached hereto (which Schedule includes the position and base
salary or wage level of each Designated Employee), on at least the same wage
rates or cash salary levels. 

7.2   No Third Party Beneficiaries. Nothing herein is intended to, and shall not
be construed to, create any third party beneficiary rights of any kind or
nature, including, without limitation, the right of any Designated Employee or
other individual to seek to enforce any right to compensation, benefits, or any
other right or privilege of employment with Seller or Purchaser.

SECTION 8.   CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER

The obligations of Purchaser under this Agreement shall, at the option of
Purchaser, be subject to the satisfaction or waiver, on or prior to the Closing
Date, of the following conditions:

8.1   No Misrepresentation or Breach of Covenants and Warranties. The
representations and warranties of Seller made in this Agreement shall be true
and correct in all material respects: (a) as of the date hereof; and (b) on and
as of the Closing Date, as though made on such date. Seller shall have performed
or complied in all material respects with all obligations and covenants required
by this Agreement to be performed or complied with by Seller on or before the
Closing Date, and Seller shall have delivered to Purchaser a certificate dated
as of the Closing Date and signed by an authorized officer of Seller confirming
the foregoing.

8.2   Necessary Governmental Approvals. All approvals and actions of or by all
Governmental Authorities which are necessary to consummate the transactions
contemplated hereby shall have been obtained or taken place, other than those as
to which the failure to have been obtained or taken place would not reasonably
be expected to result in a Material Adverse Effect.

8.3   Deliveries by Seller. Seller shall have delivered to Purchaser at Closing
all of the items specified to be delivered by Seller in Section 3.3.
 
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8.4   No Injunction. There shall not be in effect on the Closing Date any Court
Order restraining or enjoining the carrying out of this Agreement or the
consummation of the transactions contemplated by this Agreement.

8.5   Employees. Each of the Designated Employees shall have accepted
Purchaser's offer of employment.

SECTION 9.   CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER

The obligations of Seller under this Agreement shall, at the option of Seller,
be subject to the satisfaction or waiver, on or prior to the Closing Date, of
the following conditions:

9.1   No Misrepresentation or Breach of Covenants and Warranties. The
representations and warranties of Purchaser made in this Agreement shall be true
and correct: (a) as of the date hereof; and (b) on and as of the Closing Date,
as though made on such date. Purchaser shall have performed or complied in all
material respects with all obligations and covenants required by this Agreement
to be performed or complied with by Purchaser on or before the Closing Date; and
Purchaser shall have delivered to Seller a certificate dated as of the Closing
Date and signed by an authorized officer of Purchaser confirming the foregoing.

9.2   Necessary Governmental Approvals. All approvals and actions of or by all
Governmental Authorities which are necessary to consummate the transactions
contemplated hereby shall have been obtained or taken place, other than those as
to which the failure to have been obtained or taken place would not reasonably
be expected to result in any Liability to Seller or to result in any violation
of any Law.

9.3   Payment of Purchase Price. Purchaser shall have paid to Seller the
Purchase Price required to be paid pursuant to Section 1.2.

9.4   Delivery by Purchaser. Purchaser shall have delivered to Seller at Closing
all of the items specified to be delivered by Purchaser in Section 3.2.

9.5   No Injunction. There shall not be in effect on the Closing Date any Court
Order restraining or enjoining the carrying out of this Agreement or the
consummation of the transactions contemplated by this Agreement.

SECTION 10.         TERMINATION

10.1   Termination. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned:

(a)   At any time before the Closing, by written agreement of Seller and
Purchaser;

(b)   At any time before the Closing, by Seller or Purchaser, upon notification
to the other Party, in the event that any Order or Law becomes effective
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement; or

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(c)   At any time after April 15, 2006 by Seller or Purchaser, upon notification
to the other Party, if the Closing shall not have occurred and such failure to
consummate is not caused by a breach of this Agreement by the terminating Party.

10.2   Effect of Termination If this Agreement is validly terminated pursuant to
Section 10.1, this Agreement will forthwith become null and void, and there will
be no liability or obligation on the part of Seller or Purchaser (or any of
their respective Representatives or Affiliates), except as provided in the next
succeeding sentence and except that the provisions with respect to expenses in
Section 12.2 and confidentiality in Section 12.3 will continue to apply
following any such termination. Notwithstanding any other provision to the
contrary, upon termination of this Agreement pursuant to Section 10.1(b) or (c),
each Party will remain liable to the other Party for any willful breach of
Section 6.5 of this Agreement by such Party existing at the time of such
termination, and the non-breaching Party may seek such remedies against the
other Party with respect to any such breach as are provided in this Agreement or
as are otherwise available at Law or in equity.

SECTION 11.         SURVIVAL AND INDEMNIFICATION

11.1   Survival of Covenants, Representations and Warranties. The covenants,
representations and warranties of Seller and Purchaser contained in this
Agreement shall survive the Closing until the date that is twelve (12) months
from the Closing Date. This Section shall not limit in any way the survival of
any covenant or agreement of a Party to be performed after the Closing Date,
which shall survive for the applicable period set forth herein.

11.2   Indemnification By Seller. After the Closing Date, Seller agrees to
indemnify and hold harmless Purchaser from and against any and all Losses
incurred by Purchaser arising from: (a) any breach of any warranty or the
inaccuracy of any representation of Seller contained in this Agreement, and
(b) any breach by Seller of, or failure by Seller to perform, any of its
covenants or obligations contained in this Agreement.

11.3   Indemnification by Purchaser. After the Closing Date, Purchaser agrees to
indemnify and hold harmless Seller from and against any and all Losses incurred
by Seller arising from: (a) any breach of any warranty or the inaccuracy of any
representation of Purchaser contained in this Agreement, and (b) any breach by
Purchaser of, or failure by Purchaser to perform, any of its covenants or
obligations contained in this Agreement.

11.4   Notice of Claims. In the event Purchaser or Seller seeks indemnification
hereunder (such Party, an "Indemnified Party") such Party shall give promptly to
the Party obligated to provide indemnification to such Indemnified Party (the
"Indemnitor") a written notice (a "Claim Notice") describing in reasonable
detail the facts giving rise to the claim for indemnification hereunder;
provided, however, that the failure of any Indemnified Party to give the Claim
Notice promptly as required by this Section 11.4 shall not affect such
Indemnified Party's rights except to the extent such failure is actually
prejudicial to the rights and obligations of the Indemnitor.
 
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11.5   Mitigation. Each of the Parties agrees to take all reasonable steps to
mitigate their respective Losses upon and after becoming aware of any event or
condition which could reasonably be expected to give rise to any Losses that are
indemnifiable hereunder.

11.6   Subrogation. Upon making any payment to the Indemnified Party for any
indemnification claim, the Indemnitor shall be subrogated, to the extent of such
payment, to any rights which the Indemnified Party may have against any
third-person with respect to the subject matter underlying such indemnification
claim and the Indemnified Party shall assign any such rights to the Indemnitor.

11.7   Warranty. In addition to the representations and warranties made by
Seller herein, Seller hereby warrants to Purchaser that the D180 and all
Equipment shall remain in all material respects in good working order and
condition for a period of 30 days after the Closing Date. This warranty is
conditioned upon the absence of any kind of misuse or neglect.

SECTION 12.         GENERAL PROVISIONS

12.1   Notices. All notices, requests and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
to the other Party at the following addresses or facsimile numbers:

If to Seller, to:

APA Enterprises, Inc.
2950 N.E. 84th Lane
Blaine, MN 55449
Facsimile No.:
Attn: Anil K. Jain, Ph.D.

If to Purchaser, to:

International Rectifier Corporation
233 Kansas Street
El Segundo, CA 90245
Facsimile No.: (310) 726-8484
Attn: Executive Vice President and General Counsel

All such notices, requests and other communications will be deemed given upon
receipt. Any Party from time to time may change its address, facsimile number or
other information for the purpose of notices to that Party by giving notice
specifying such change to the other Party.

12.2   Expenses. Except as otherwise expressly provided in this Agreement
(including without limitation as provided in Section 10.2), whether or not the
transactions contemplated hereby are consummated, each Party will pay its own
costs and expenses incurred in connection with the negotiation, execution and
closing of this Agreement and the transactions contemplated hereby.
 
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12.3   Confidentiality. Each Party hereto will hold, and will cause its
Representatives to hold in strict confidence all documents and information
concerning the other Party or any of its Affiliates furnished to it by the other
Party or such other Party’s Representatives in connection with this Agreement or
the transactions contemplated hereby unless (i) compelled to disclose by
judicial or administrative process (including without limitation in connection
with obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby of Governmental Authorities) or by other requirements of Law
or (ii) disclosed in an Action or Proceeding brought by a Party in pursuit of
its rights or in the exercise of its remedies hereunder; provided that the
foregoing covenant of confidentiality shall not apply to documents or
information that is shown to have been (a) previously known by the receiving
Party, (b) in the public domain (either prior to or after the furnishing of such
documents or information hereunder) through no fault of such receiving Party or
(c) later acquired by the receiving Party from another source if the receiving
Party is not aware that such source is under an obligation to the other Party to
keep such documents and information confidential. In the event the transactions
contemplated hereby are not consummated, upon the request of the other Party,
each Party will, and will cause its Representatives to, promptly redeliver or
cause to be redelivered all copies of confidential documents and information
furnished by the other Party in connection with this Agreement or the
transactions contemplated hereby and destroy or cause to be destroyed all notes,
memoranda, summaries, analyses, compilations and other writings related thereto
or based thereon prepared by such Party or its Representatives.

12.4   Waiver. Any term or condition of this Agreement may be waived at any time
by the Party that is entitled to the benefit thereof, but no such waiver shall
be effective unless set forth in a written instrument duly executed by or on
behalf of the Party waiving such term or condition. No waiver by a Party of any
term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under this
Agreement or afforded by Law, are cumulative and not alternative.

12.5   Amendment. This Agreement may be amended, supplemented or modified only
by a written instrument duly executed by each Party.

12.6   No Third Party Beneficiary. The terms and provisions of this Agreement
are intended solely for the benefit of the Parties hereto and their respective
successors or permitted assigns, and it is not the intention of the Parties to
confer third-party beneficiary rights upon any other Person.

12.7   No Assignment; Binding Effect. Neither this Agreement nor any right,
interest or obligation hereunder may be assigned by either Party without the
prior written consent of the other Party and any attempt to do so will be void,
except (a) for assignments and transfers by operation of Law, and (b) that
Purchaser may assign any or all of its rights, interests and obligations
hereunder to a wholly-owned subsidiary, provided that such subsidiary agrees in
writing to be bound by all of the provisions contained herein. Subject to the
preceding sentence, this Agreement is binding upon, inures to the benefit of and
is enforceable by the Parties and their respective successors and assigns.

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12.8    Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.

12.9     Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, and if the rights or obligations of a Party
under this Agreement will not be materially and adversely affected thereby,
(a) such provision will be fully severable, (b) this Agreement will be construed
and enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, and (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance herefrom.

12.10   Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of California applicable to a contract
executed and performed in such State, without giving effect to the conflicts of
laws principles thereof.

12.11   Jurisdiction; Waiver of Jury Trial. The Parties hereby agree that any
Action or Proceeding arising out of or related to this Agreement shall be
conducted only in the County of Los Angeles, California. Each Party hereby
irrevocably consents and submits to the exclusive personal jurisdiction of and
venue in the federal and state courts located in the County of Los Angeles,
California. Each Party hereby waives to the fullest extent permitted by
applicable Law, any right it may have to a trial by jury in respect of any
litigation directly or indirectly arising out of, under or in connection with
this Agreement or any transaction contemplated hereby. Each Party agrees that
service of any summons, complaint or other initial pleading made in the manner
provided for the giving of notices in Section 12.1 shall be effective service in
such Action or Proceeding. Nothing in this Section 12.11, however, shall affect
the right of a Party to serve such summons, complaint or initial pleading in any
other manner permitted by Law.

12.12   Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

12.13   Interpretation. The Schedules referred to herein are an integral part of
this Agreement to the same extent as if they were set forth verbatim herein.
This Agreement shall be construed without regard to any presumption or rule
requiring construction or interpretation against the Party drafting or causing
any instrument to be drafted.

12.14   Entire Agreement. This Agreement, including the Exhibits and Schedules
hereto, supersedes all prior discussions and agreements between the Parties with
respect to the subject matter hereof and contains the sole and entire agreement
between the Parties hereto with respect to the subject matter hereof.

12.15   Circular 230 Disclaimer. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES AND
AGREES THAT (1) NO PROVISION OF THIS AGREEMENT, AND NO WRITTEN COMMUNICATION OR
DISCLOSURE BETWEEN OR AMONG THE PARTIES OR THEIR ATTORNEYS AND OTHER ADVISERS,
IS OR WAS INTENDED TO BE, NOR SHALL ANY SUCH COMMUNICATION OR DISCLOSURE
CONSTITUTE OR BE CONSTRUED OR BE RELIED UPON AS, TAX ADVICE WITHIN THE MEANING
OF UNITED STATES TREASURY DEPARTMENT CIRCULAR 230 (31 CFR PART 10, AS AMENDED);
(2) THE ACKNOWLEDGING PARTY (A) HAS RELIED EXCLUSIVELY UPON ITS OWN, INDEPENDENT
LEGAL AND TAX ADVISERS FOR ADVICE (INCLUDING TAX ADVICE) IN CONNECTION WITH THIS
AGREEMENT, (B) HAS NOT ENTERED INTO THIS AGREEMENT BASED UPON THE RECOMMENDATION
OF ANY ATTORNEY OR ADVISOR TO THE OTHER PARTY, AND (C) IS NOT ENTITLED TO RELY
UPON ANY COMMUNICATION OR DISCLOSURE BY ANY ATTORNEY OR ADVISER TO THE OTHER
PARTY TO AVOID ANY TAX PENALTY THAT MAY BE IMPOSED ON THE ACKNOWLEDGING PARTY;
AND (3) NO ATTORNEY OR ADVISER TO THE OTHER PARTY HAS IMPOSED ANY LIMITATION
THAT PROTECTS THE CONFIDENTIALITY OF ANY SUCH ATTORNEY'S OR ADVISER'S TAX
STRATEGIES (REGARDLESS OF WHETHER SUCH LIMITATION IS LEGALLY BINDING) UPON
DISCLOSURE BY THE ACKNOWLEDGING PARTY OF THE TAX TREATMENT OR TAX STRUCTURE OF
ANY TRANSACTION, INCLUDING ANY TRANSACTION CONTEMPLATED BY THIS AGREEMENT.

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IN WITNESS WHEREOF, the Parties hereto have caused this Asset Purchase Agreement
to be executed and delivered as of the day and year first written above.
 
 APA ENTERPRISES, INC.
 
 
 INTERNATIONAL RECTIFIER CORPORATION
 
 
By:
 /s/ Anil K. Jain
   By:
/s/ Alexander Lidow
 
Name:
Anil K. Jain
   Name:
Alexander Lidow
 
Title:
CEO
   Title:
CEO

 
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Exhibit A

CERTAIN DEFINITIONS

In this Agreement, the following terms have the meanings specified or referred
to in this Exhibit A and shall be equally applicable to both the singular and
plural forms. Any agreement referred to below shall mean such agreement as
amended, supplemented and modified from time to time to the extent permitted by
the applicable provisions thereof and by this Agreement.

"Action or Proceeding" means any lawsuit, legal proceeding, litigation,
arbitration or action.

"Affiliate" means any Person that directly, or indirectly through one of more
intermediaries, controls or is controlled by or is under common control with the
Person specified. For purposes of this definition, control of a Person means the
power, direct or indirect, to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise.

"Agreement" means this Asset Purchase Agreement, together with the Schedules and
Exhibits attached hereto.

"Assets" is defined in Section 1.1(a).

"Benefit Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock, stock option, leave of absence,
layoff, vacation, dependent care, life, health, accident, disability, workmen’s
compensation or other insurance, severance, separation or other employee benefit
plan or arrangement, existing at the Closing Date, to which Seller contributes
or has contributed on behalf of any Designated Employee.

"Business Day" means a day other than Saturday, Sunday or any day on which banks
located in the State of California are authorized or obligated to close.

"Closing" means the consummation of the transactions contemplated by Section 2.

"Closing Date" is defined in Section 2.1.

"Code" means the Internal Revenue Code of 1986, as amended.

"Court Order" means any judgment, order, writ, decision, injunction, award or
decree of any foreign, federal, state, local or other court or tribunal and any
ruling or award in any binding arbitration proceeding.

"Consumables" is defined in Section 1.1(a)(iii).

"D180" is defined in Section 1.1(a)(i).
 
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"Designated Employee" is defined in Section 7.1.

"Encumbrance" means any lien, encumbrance, claim, charge, security interest,
mortgage, deed of trust, pledge, easement, conditional sale or other title
retention agreement, defect in title or other restriction of a similar kind.

"Equipment" is defined in Section 1.1(a)(iv).

"Expenses" means any and all reasonable out-of-pocket expenses incurred in
connection with investigating, defending or asserting any claim, action, suit or
proceeding incident to any matter indemnified against hereunder (including,
without limitation, court filing fees, court costs, arbitration fees or costs,
witness fees and reasonable fees and disbursements of legal counsel,
investigators, expert witnesses, accountants and other professionals).

"GaN Intellectual Property" is defined in Section 1.1(a)(v).

"Governmental Authority" means any court, tribunal, arbitrator, authority,
agency, commission, official or other instrumentality of the United States or
any state, county, city or other political subdivision thereof.

"Intellectual Property" means all patents and patent rights, trademarks and
trademark rights, trade names and trade name rights, service marks and service
mark rights, service names and service name rights, brand names, inventions,
copyrights and copyright rights, processes, formulae, trade dress, business and
product names, logos, slogans, trade secrets, works of authorship, mask works,
industrial models, processes, designs, methodologies, computer programs
(including all source codes) and related documentation, technical information,
manufacturing, engineering and technical drawings, know-how and all pending
applications for and registrations of patents, trademarks, service marks and
copyrights.

"IR" is defined in the preamble of this Agreement.

"Knowledge of Seller," "Seller's Knowledge" or "Knowledge," when used in
connection with Seller, means, as to a particular matter, the actual knowledge
of the officers of Seller.

"Law" means any law, statute, treaty, rule, regulation, ordinance, order,
decree, consent decree or similar instrument or determination or award of an
arbitrator or a court or any other Governmental Authority.

"Liability (and with correlative meaning, "Liabilities")" means all
indebtedness, obligations, damages, fines, fees, and other liabilities (or
contingencies that have not yet become liabilities), whether absolute, accrued,
matured, contingent (or based upon any contingency), known or unknown, fixed or
otherwise, or whether due or to become due, including without limitation, any
fines, penalties, judgments, awards or settlements respecting any judicial,
administrative or arbitration proceedings or any damages, losses, claims or
demands with respect to any Law.
 
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"Liens" means any mortgage, pledge, assessment, security interest, lease, lien,
adverse claim, levy, charge or other encumbrance of any kind, or any conditional
sale contract, title retention contract or other contract to give any of the
foregoing.

"Material Adverse Effect" means any change, circumstance or effect that has a
material adverse effect on the Assets taken as a whole.

"Permits" means all licenses, permits, franchises, approvals, authorizations,
consents or orders of, or filings with, any Governmental Authority, or any other
Person, necessary for use of the Assets.

"Permitted Liens" is defined in Section 4.3.

"Person" means an individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.

"Purchase Price" is defined in Section 1.2.

"Purchaser" is defined in the preamble of this Agreement.

"Seller" is defined in the preamble of this Agreement.

"Spare Parts" is defined in Section 1.1(a)(ii).

"Tax" (and, with correlative meaning, "Taxes") means any federal, state, local
or foreign income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, withholding, alternative or add-on minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever, together with any
interest or penalty, imposed by any Governmental Authority.

"Transaction Agreements" means all agreements, instruments and documents being
or to be executed and delivered by a Party pursuant to this Agreement.

"Veeco" is defined in Section 1.1(a)(i).

For the avoidance of doubt, unless the context of this Agreement otherwise
requires, (i) words of any gender include each other gender; (ii) words using
the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Agreement; (iv) the term "Section" refers to
the specified Section of this Agreement; and (v) the term "including" means
"including, without limitation." Whenever this Agreement refers to a number of
days, such number shall refer to calendar days unless Business Days are
specified. Any representation or warranty contained herein as to the
enforceability of a contract shall be subject to the effect of any bankruptcy,
insolvency, reorganization, moratorium or other similar law affecting the
enforcement of creditors' rights generally and to general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at Law).
 
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Exhibit B
 
PATENT AND TECHNOLOGY LICENSE AGREEMENT

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Exhibit C
 
CONSULTING AGREEMENT

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Exhibit D
 
BILL OF SALE
 
THIS BILL OF SALE is dated as of March 9, 2006 by and between International
Rectifier Corporation, a Delaware corporation ("Purchaser") and APA Enterprises,
Inc., a Minnesota corporation ("Seller").
 
WHEREAS, Purchaser and Seller have entered into an Asset Purchase Agreement,
dated as of March 9, 2006 (the “Asset Purchase Agreement”; capitalized terms not
defined herein shall have the meanings ascribed to them in the Asset Purchase
Agreement), pursuant to which Seller has agreed to sell, transfer, convey,
assign and deliver to Purchaser and Purchaser has agreed to purchase from Seller
the assets described in Section 1.1 of the Asset Purchase Agreement (the
"Assets");
 
WHEREAS, Seller desires to transfer and assign to Purchaser the Assets and
Purchaser desires to accept the sale, transfer, conveyance, assignment and
delivery thereof;
 
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, Seller hereby irrevocably sells, transfers,
conveys, assigns and delivers to Purchaser the Assets, TO HAVE AND TO HOLD the
same unto Purchaser, its successors and assigns, forever.
 
Purchaser hereby accepts the sale, transfer, conveyance, assignment and delivery
of the Assets.
 
At any time or from time to time after the date hereof, at Purchaser’s request
and without further consideration, Seller shall execute and deliver to Purchaser
such other instruments of sale, transfer, conveyance, assignment and
confirmation, provide such materials and information and take such other actions
as Purchaser may reasonably deem necessary or desirable in order more
effectively to transfer, convey and assign to Purchaser, and to confirm
Purchaser’s title to, all of the Assets.
 
This Bill of Sale may be executed in any number of counterparts, each of which
will be deemed an original, but all of which together will constitute one and
the same instrument.
 
This Bill of Sale shall be governed by and construed in accordance with the laws
of the State of California applicable to a contract executed and performed in
such State without giving effect to the conflicts of laws principles thereof,
except that if it is necessary in any other jurisdiction to have the law of such
other jurisdiction govern this Bill of Sale in order for it to be effective in
any respect, then the laws of such other jurisdiction shall govern this Bill of
Sale to such extent.

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IN WITNESS WHEREOF, the undersigned have caused their duly authorized officers
to execute this Bill of Sale on the day and year first above written.

 
PURCHASER:
       
International Rectifier Corporation, a Delaware corporation
             
By:
/s/ Alexander Lidow
   
Name: Alexander Lidow
   
Title: CEO
             
SELLER:
       
APA Enterprises, Inc., a Minnesota corporation
             
By:
/s/ Anil K. Jain
   
Name: Anil K. Jain
   
Title: CEO

 
 
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.