Asset Purchase Agreement

Exhibit 10.31 EXECUTION COPY ASSET PURCHASE AGREEMENT by and among iWatt, Inc. IKOR Acquisition Corporation and Advanced Energy Industries, Inc .Dated November 23, 2005


TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS 1 1.1 Defined Terms. 1 ARTICLE 2 TRANSFER OF ASSETS 9 2.1 Closing 9 2.2 Transfer of Assets 9 2.3 Assumption of Liabilities 10 2.4 Excluded Liabilities 10 2.5 Payments to Seller 11 2.6 Allocation of Purchase Price 11 2.7 Closing Deliveries; Collateral Agreements 11 2.8 Further Assurances, Conveyances, Agreement to Perform Necessary Acts 12 2.9 Responsibility for Taxes and Tax Returns 13 2.10 Withholding Rights 14 2.11 Transfer Taxes 14 ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER 14 3.1 Organization of Seller 15 3.2 Authorization of Transaction 15 3.3 Non-contravention; Consents 15 3.4 Title of Properties; Absence of Liens and Encumbrances; Condition 16 3.5 Intellectual Property Rights 16 3.6 Brokers' and Finders' Fees 19 3.7 Legal and Other Compliance 19 3.8 Transferred Assets and Transferred Technology 19 3.9 Environmental Matters 20 3.10 Litigation 20 3.11 Employment Matters 20 3.12 Bulk Transfer Laws 22 3.13 Business Financial Information 22 3.14 Contracts; No Defaults 23 3.15 Warranties; Defects; Liabilities. 23 3.16 Insurance 23 3.17 Tax Matters 24 3.18 Accounts Receivable 24 3.19 Inventory 24 3.20 Representations and Disclosures Complete 25 ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER 25 4.1 Organization 25 4.2 Authority for Agreement 25 4.3 Noncontravention 25

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TABLE OF CONTENTS (Continued) Page ARTICLE 5 ADDITIONAL AGREEMENTS OF THE PARTIES 26 5.1 Operation of the Business 26 5.2 Access 27 5.3 Post-Closing Audits of Business Financial Statements 28 5.4 Third Party Consents; Assignment of Transferred Contracts 28 5.5 Renewal Fees 29 5.6 Transition Services 29 5.7 Software Other than IT Systems 30 5.8 Technology Documentation 30 5.9 Intellectual Property 31 5.10 Reasonable Best Efforts 31 5.11 No Other Bids 31 5.12 Confidentiality; Public Announcements 32 5.13 Covenant Not to Compete 32 5.14 Covenant Not to Solicit or Hire 33 5.15 Notification of Certain Matters 33 5.16 Severability of Covenants 34 5.17 SEC Support Letter 34 ARTICLE 6 EMPLOYEES 34 6.1 Seller Cooperation 34 6.2 Employment Offers 34 6.3 Waiver 35 6.4 Employees 35 6.5 COBRA Continuation Coverage 35 6.6 Employee Liability Claims 36 ARTICLE 7 CLOSING, PURCHASE PRICE AND PAYMENTS 37 7.1 Conditions to Obligations of Buyer 37 7.2 Conditions to Obligations of Seller 38 ARTICLE 8 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION 40 8.1 Survival of Representations and Warranties 40 8.2 Indemnification by Seller 40 8.3 Limitation on Indemnification 41 8.4 Indemnification Procedure 41 8.5 Escrow 42 8.6 Purchase Price Adjustment 43 ARTICLE 9 TERMINATION AND ABANDONMENT 43 9.1 Methods of Termination 43 9.2 Procedure upon Termination 44 9.3 Survival of Certain Provisions 44

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TABLE OF CONTENTS (Continued) Page ARTICLE 10 GENERAL 44 10.1 No Agency 44 10.2 Fees and Expenses 44 10.3 Notices 45 10.4 Governing Law 45 10.5 Forum and Venue 45 10.6 Construction 46 10.7 Breaches and Remedies 46 10.8 Waiver 46 10.9 Assignment 47 10.10 Severability 47 10.11 Entire Agreement 47 10.12 Amendments 47 10.13 Counterparts 47

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ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (this " Agreement" ) is made and entered into as of November 23,2005 (the " Effective Date" ), by and among iWatt, Inc., a California corporation (the " Parent" ), IKOR Acquisition Corporation, a Delaware corporation and wholly owned subsidiary of Parent (the " Buyer" ), and Advanced Energy Industries, Inc., a Delaware corporation (the " Seller" ), each, a " Party ," together, the " Parties" . RECITALS WHEREAS , Seller is currently engaged in, among other things, the Business (as defined below) in its IKOR division; WHEREAS , Parent and Buyer wish to purchase all assets, tangible and intangible, of Seller used in or necessary for the operation of the Business; WHEREAS , Seller wishes to sell such assets to Parent and Buyer; and WHEREAS , the Parties desire that certain current employees of Seller become employees of Buyer. NOW, THEREFORE , in consideration of the covenants, promises, representations and warranties set forth herein, and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by the Parties), intending to be legally bound hereby, the Parties agree as follows: Article 1
DEFINITIONS 1.1 Defined Terms . The following capitalized terms shall have the meanings set forth below: (a) " Affiliate" means with respect to a Person, a Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by, or is under common Control with, such Person, including any Subsidiary of such Person. A " Subsidiary" means with respect to a Person, a Person that directly, or indirectly through one or more intermediaries, is Controlled by such Person. For the purposes of this definition of " Affiliate" , " Control" (including derivative forms such as " Controlling ," " Controlled by" and " under common Control with" ) means the ownership or possession, direct or indirect by the controlling Person of: (a) voting shares or other securities, representing more than fifty percent (50%) of the outstanding shares or securities entitled to vote for the election of the board of directors or similar managing authority of such controlled Person; or (b) if such controlling Person does not have voting shares or other securities, more than fifty percent (50%) of the ownership interest that represents the right to make decisions, including the election of directors, for such controlled Person.


(b) " Assigned IPR" means (i) the Assigned Patents and (ii) the Assigned Trademarks. (c) " Assigned Patents" means each of the Patents and invention disclosures set forth in Schedule 1.1(c) and any Patents that are a member of the same Patent Family as any one of such scheduled Patents, in each case whether pending, issued, expired, abandoned or closed, and all foreign counterparts of any such Patent. (d) " Assigned Trademarks" means each of the Trademarks listed or described in Schedule 1.1(d) , in each case whether or not such Trademarks are Registered IP or registerable as Registered IP. (e) " Benefit Plan" means any plan, program, policy, practice, contract, agreement or other arrangement providing for compensation, severance, termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe benefits or other employee benefits or remuneration of any kind, whether written or unwritten or otherwise, funded or unfunded, including without limitation, each " employee benefit plan," within the meaning of Section 3(3) of ERISA which is maintained, contributed to, or required to be contributed to, by Seller or any ERISA Affiliate for the benefit of any Employee, or with respect to which Seller or any ERISA Affiliate has or may have any liability or obligation. (f) " Bill of Sale" means one or more fully executed bills of sale for the Transferred Tangible Assets, in a form set forth in Schedule 1.1(f) . (g) " Books and Records" means the books and records of Seller and its Affiliates that are or have been related to, used in or necessary for the operation of the Business, the Transferred Assets or the Designated Employees, including books of account; the sales records; customer lists and information; supplier lists and information; Transferred Product records; marketing materials; distributor and other sales information; copies of Transferred Contracts; product and design materials (for internal or external use); plans; drawings; general financial and accounting data; documentation sufficient to fully utilize, understand and implement the Transferred Assets (including the Transferred Tangible Assets and Assigned IPR); technical and operating materials (for internal or external use); in each case in whatever form (hard copy or electronic) relating to the Transferred Assets, copies of policies and procedures or other communications regarding marketing and customer matters, and the Patent Files. (h) " Business" means the development, sale, licensing, distribution and support of power supply components, modules and systems utilized in computing, office automation and communications products, including the business, intellectual property, technology, assets and operations of Seller and its Affiliates currently conducted in its " IKOR" business unit, and the activities and operations of the Designated Employees. (i) " Closing Date" means the date upon which the Closing occurs in accordance with Section 2.1 . (j) " Code" means the Internal Revenue Code of 1986, as amended.

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(k) " Confidential Information" means any nonpublic information disclosed by one Party (the " Disclosing Party" ) to the other (the " Receiving Party" ) (including any nonpublic information disclosed in the course of the performance of the Transition Services): (a) which relates to the actual or anticipated business or research and development of the Disclosing Party, technical data, trade secrets or know-how, including, but not limited to, research, product plans or other information regarding the Disclosing Party' s products or services and markets therefor, customer lists and customers, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances or other business information or (b) which is otherwise deemed to be " Confidential Information" by the terms of this Agreement, other than information the Receiving Party can demonstrate was in the public domain at the time of disclosure through no act or omission on the part of the Receiving Party. (l) " Consent" means any consent, approval, permit, or authorization of any Person not a Party to this Agreement. (m) " Control ," " Controls ," " Controlled" or " Controlling" means, with respect to any Intellectual Property Rights, the possession by Seller or its Affiliates of the right to grant a license or sublicense under such Intellectual Property Rights of the scope provided herein without incurring an obligation to pay additional consideration to a third party (except for payments among such Party and its Affiliates, and payments to employees for inventions made by them while employed by such Party or its Affiliates made in the ordinary course of their employment). (n) " Designated Employees" means the individuals listed on Schedule 1.1(n) (including individuals identified between the Effective Date and the Closing Date and added to Schedule 1.1(n) in accordance with Section 6.1 ) as " Designated Employees." For clarity, any reference in this Agreement to " Designated Employees" shall include all individuals on Schedule 1.1(n) that are also designated as " Key Employees." (o) " Employee" shall mean any current or former employee, consultant or director of Seller or any ERISA Affiliate, who has provided services to the Business. (p) " Employment Agreement" shall mean each management, employment, severance, consulting, relocation, repatriation, expatriation, visa, work permit or other agreement, contract or understanding between Seller or any ERISA Affiliate and any Employee. (q) " Employment Liabilities" shall mean any and all claims, debts, liabilities, commitments and obligations, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever or however arising, including all costs and expenses relating thereto arising under law, rule, regulation, permit, action or proceeding before any governmental authority, order or consent decree or any award of any arbitrator of any kind relating to any Benefit Plan, Employment Agreement or otherwise relating to an Employee and his or her employment with Seller or any ERISA Affiliate. (r) " ERISA Affiliate" shall mean each subsidiary of Seller and any other person or entity under common control with Seller or any of its subsidiaries within the meaning of Section 414(b), (c), (m) or (o) of the Code and the regulations issued thereunder.

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(s) " ERISA" means the Employee Retirement Income Security Act of 1974, as amended. (t) " Escrow Agent" means the escrow agent identified in the Escrow Agreement. (u) " Escrow Agreement" means an Escrow Agreement among Parent, Buyer, Seller and Escrow Agent (as identified therein) effective as of the Closing Date, in the form attached hereto as Exhibit A. (v) " Excluded Assets" means (a) all of Seller' s tangible assets other than the Transferred Assets, (b) all cash, (c) all amounts prepaid on any insurance policy maintained by the Seller on behalf of the Business and (d) such other assets of Seller as are listed on Schedule 1.1(v) . (w) " Exploit" or " Exploitation" means with respect to any Technology, process or product, to make, have made, use, modify, enhance, sell, offer for sale, market, import, make derivative works from, perform, copy, disclose, or distribute such product or Technology (or derivative thereof) or practice such process (or derivative thereof), as the case may be. (x) " Governmental Entity" means any court, administrative agency or commission or other federal, state, provincial, county, local or other governmental authority, instrumentality, agency or commission in any country worldwide. (y) " Hazardous Material" means any substance that has been designated by any Governmental Entity or by applicable federal, state or local law to be radioactive, toxic, hazardous or otherwise a danger to health or the environment, including, without limitation all substances listed as hazardous substances pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, or defined as a hazardous waste pursuant to the United States Resource Conservation and Recovery Act of 1976, as amended, and the regulations promulgated pursuant to said laws. (z) " Intellectual Property Rights" or " IPR" means any or all of the following and all statutory and/or common law rights throughout the world in, arising out of, or associated therewith: (a) all patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof and all rights that claim priority therefrom, along with each foreign patent or patent application that shares common disclosure therewith (collectively, " Patents" ); (b) all inventions (whether patentable or not), invention disclosures and improvements, all trade secrets, proprietary information, know-how and technology; (c) all works of authorship, copyrights, rights in Mask Works, copyright and Mask Work registrations and applications; (d) all industrial designs and any registrations and applications therefor; (e) all trade names, logos, trademarks and service marks; trademark and service mark registrations and applications (collectively, " Trademarks" ); (f) all databases and data collections (including knowledge databases, customer lists and customer databases) and all rights therein; (g) all rights in Software; (h) rights to Uniform Resource Locators, Web site addresses and domain names; (i) any similar, corresponding or equivalent rights to any of the foregoing and (j) all moral and equivalent rights throughout the world.

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(aa) " Key Employees" means the Designated Employees listed on Schedule 1.1(n) that are specified as " Key Employees" . (bb) " Liability" means any liability, duty, obligation or indebtedness (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether incurred or consequential and whether due or to become due), including any liability for Taxes. (cc) " License Agreement" means that license agreement entered into between Seller and Parent and Buyer effective as of the Closing Date, in the form attached hereto as Exhibit F pursuant to which Seller licenses to Parent and Buyer the Licensed IPR. (dd) " Licensed IPR" means all Intellectual Property Rights (other than the Assigned IPR) used in or necessary for the operation of the Business. (ee) " Lien" means any mortgage, pledge, lien, security interest, charge, claim, equity, encumbrance, limitation, restriction on use or transfer, conditional sale or other title retention device or arrangement (including, without limitation, a capital lease), transfer for the purpose of subjection to the payment of any indebtedness, or restriction on the creation of any of the foregoing, whether relating to any property or right or the income or profits therefrom. (ff) " Loss" means any and all Liabilities, losses, damages, claims, costs and expenses, interest, awards, judgments and penalties (including without limitation legal costs and expenses and interest on the amount of any Loss from the date suffered or incurred). (gg) " Mask Works" means the physical mask works or reticles for the manufacture or customization of a semiconductor device. (hh) " Open Source Software" means Software or other material that is distributed as " free software," " open source software" or under a similar licensing or distribution model (including but not limited to the GNU General Public License (GPL) and GNU Lesser General Public License (LGPL)) that require, as a condition of use, modification and/or distribution of such Open Source Software that other Software incorporated into, derived from or distributed with such Open Source Software be (a) disclosed or distributed in source code form; (b) be licensed for the purpose of making derivative works; or (c) be redistributable at no charge. (ii) " Patent Family" means a set comprised of all Patents that (a) are directly or indirectly linked or entitled to be linked through one or more Priority Claims or by a terminal disclaimer (including under 35 U.S.C. Sec. 253 or 37 CFR 1.321 or the equivalent laws or regulation of any other patent authority); (b) are foreign counterparts, reissues, divisionals, renewals, extensions, parents, continuations or continuations-in-part with respect to any other Patent in such set; or (c) issue from any of the foregoing. (jj) " Patent Files" means complete prosecution files for the Assigned Patents, including all correspondence and filings with patent authorities with respect to such Patents and any related materials or documents in the possession or control of Seller or its Affiliates or any attorney or patent agent involved in the prosecution or enforcement of such Patents.

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(kk) " Person" means an individual, partnership, corporation, limited liability company, association, joint venture, trust, unincorporated organization or Governmental Entity. (ll) " Priority Claim" means a claim to priority made in any Patent or Patent application to any other Patent or Patent application pursuant to 35 U.S.C. Secs. 120 or 119(e) or the equivalent claim to priority under the laws and regulations applicable to a foreign Patent or Patent application, as the case may be. (mm) " Product Software" means all Software that is included in or part of any version of the Transferred Products as firmware or otherwise, or that is part of or related to the use, operation, programming, verification, design, simulation, testing, support or application of a Transferred Product or the reference design related thereto, including the Software listed or described on Schedule 1.1(mm), all versions of any of the foregoing, and any Software from which any of the foregoing Software was derived or that was derived from such Software. (nn) " Registered IP" means all United States, international and foreign: (a) Patents; (b) registered Trademarks, applications to register Trademarks, intent-to-use applications, or other registrations or applications related to Trademarks; (c) registered copyrights and applications for copyright registration; (d) domain name registrations; and (e) any other Intellectual Property Rights that are the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any Governmental Entity. (oo) " Software" means any and all computer software and code, including assemblers, applets, compilers, source code, object code, data (including image and sound data), design tools and user interfaces, in any form or format, however fixed. Software includes source code listings and documentation. (pp) " Tax" and " Taxes" means (a) any and all federal, provincial, state, and local taxes in any country worldwide (including estimated taxes), assessments, and other governmental charges, duties, impositions and liabilities, including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value-added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed with respect to such amounts; (b) any liability for the payment of any amounts of the type described in clause (a) of this definition as a result of being a member of an affiliated, consolidated, combined or unitary group for any period; and (c) any liability for the payment of any amounts of the type described in clause (a) or (b) of this definition as a result of any express or implied obligation to indemnify any other person or as a result of any obligations under any agreements or arrangements with any other person or entity with respect to such amounts and including any liability for taxes of a predecessor entity. (qq) " Technology" means all technology, including all know-how, show-how, techniques, design rules, trade secrets, inventions (whether or not patented or patentable) and invention disclosures, algorithms, routines, Software, files, databases, works of authorship, processes, devices, prototypes, lab notebooks, reference designs, test boards, test fixtures, test programs, development and lab equipment, schematics, netlist, Mask Works, test methodologies, documentation, hardware development tools, any media on which any of the foregoing is recorded, and any other tangible embodiments of any of the foregoing.

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(rr) " Transferred Claims" means all rights and claims of Seller or its Subsidiaries related to the Business against any third parties, including all rights under express or implied warranties relating to the Business or the ownership, use, function or value of any Transferred Asset. (ss) " Transferred Contracts" means those contracts listed on Schedule 1.1(ss) , and all open purchase agreements and other agreements to purchase work in progress with respect to the Transferred Products. (tt) " Transferred Inventory" means any and all inventory, wherever located, including raw materials, work in process, finished products, recycled materials, inventoriable supplies, and spare parts owned by Seller and its Affiliates and related to, used in, or necessary for the operation of the Business, and any rights of Seller and its Affiliates to the warranties received from suppliers of such inventory and any and all rights of Seller and its Affiliates to related claims, credits, rights of recovery and setoff with respect to such inventory, but only to the extent such rights are assignable. (uu) " Transferred Permits" means all governmental permits and licenses, certificates of inspection, approvals or other authorizations issued to Seller with respect to the Business or the premises used in connection with the Business and necessary for the operation or conduct of the Business as currently conducted under applicable laws. (vv) " Transferred Personal Property" means any and all personal property (including equipment, computers, servers, machinery, furniture, office equipment, furnishings, office supplies, storage devices, etc.) that are or have been, related to, used in or necessary for the operation of the Business. For the avoidance of doubt, such Transferred Personal Property shall include any personal property related to, used in or necessary for the operation of the Business that was previously provided to Seller under a leasing arrangement that is not covered under a Transferred Contract (e.g. copy machines, phone systems, etc.). (ww) " Transferred Products" means any and all products, in whatever stage of development and in whatever form, that are (a) designed by or for, or related to, the Business; or (b) otherwise listed or described on Schedule 1.1(ww) and any Product Software that is part of such Transferred Products, and any reference designs or development boards or platforms for such Transferred Products (including boards and systems for the simulation, test or verification of such Products) (x) that are of the type provided to actual or potential purchasers for use with or evaluation of such Transferred Products or (y) otherwise listed or described on Schedule 1.1(ww) . (xx) " Transferred Tangible Assets" means all tangible assets of any type or nature, other than Excluded Assets, that are or have been: (a) used in or necessary for the operation of the Business, including the Transferred Products, Transferred Personal Property and Transferred Inventory; (b) reflected on the Business' s balance sheet, including accounts receivable; or (c) otherwise described on Schedule 1.1(xx) . (yy) " Transferred Technology" means all Technology used in or necessary to the operation of the Business or constituting any of the Transferred Products or otherwise listed or described on Schedule 1.1(yy) and including all (a) know-how and other Technology known by any

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and all Designated Employees, whether or not such Technology was reduced to any tangible media on or prior to the Closing Date; (b) copies and versions of the Product Software; (c) Technology that is used in the design, development, manufacture or testing Transferred Products (including all versions of any design tools or development environments used in the design of any Transferred Product); (d) Mask Works, netlists, GERBER files and other representations of any Transferred Product; and (e) files necessary for the operation of the Transferred Websites, including all of the content therein. (zz) " Transferred Websites" means those Web sites (including content) and the Uniform Resource Locators set forth in Schedule 1.1(zz) . (aaa) Each of the following terms is defined in the Section or Exhibit set forth opposite such term: TERM SECTION/EXHIBIT " Allocation" Section 2.6" Assumed Liabilities" Section 2.3" Audit Completion Date" Section 5.3" Buyer Indemnitee" Section 8.2" Buyer Indemnitees" Section 8.2" Cash Amount" Section 2.5(a)" Claim" Section 8.4(a)" Closing" Section 2.1" Closing Date" Section 2.1" COBRA" Section 6.5" Collateral Agreements" Section 2.7(b)" Conflict" Section 3.3" Disclosing Party" Section 1.1(k)" Disclosure Schedule" Article 3" Employee Excluded Liabilities" Section 6.6(a)" Escrow Amount" Section 2.5(b)" Excluded Liabilities" Section 2.4" Indemnifiable Audit Costs" Section 5.3" International Employee Plan" Section 3.11(a)" IP Assignments" Section 2.7(b)" M&A Qualified Beneficiaries" Section 6.5" Multiemployer Plan" Section 3.11(a)" Non-Assignable Contract" Section 5.4" Non-Paying Party" Section 2.9(c)" Patents" Section 1.1(z)" Paying Party" Section 2.9(c)" Pension Plan" Section 3.11(a)" Purchase Price" Section 2.5(b)" Receiving Party" Section 1.1(k)" Selling Group" Section 6.5" Straddle Period Taxes" Section 2.9(c)

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TERM SECTION/EXHIBIT " Tax Returns" Section 2.9" Termination Date" Section 9.1" Trademarks" Section 1.1(z)" Transfer Taxes" Section 2.11" Transferred Assets" Section 2.2" Transition Services" Section 5.6" Transition Services Fees" Section 5.6 Article 2
TRANSFER OF ASSETS 2.1 Closing . Subject to the terms hereof, the closing of the transactions contemplated by this Agreement (the " Closing" ) will take place on a date occurring as promptly as reasonably practicable but no later than two (2) days following the date on which all conditions set forth in Sections 7.1 and 7.2 have been satisfied or waived, or on such date as may be agreed upon by the Parties (the " Closing Date" ), at the offices of Wilson Sonsini Goodrich & Rosati, Professional Corporation, 650 Page Mill Road, Palo Alto, CA 94304. 2.2 Transfer of Assets . Upon the terms and subject to the conditions set forth in this Agreement, effective as of the Closing Date, Seller shall, and shall cause its Affiliates to, grant, deliver, sell, convey, transfer and assign to Buyer or its Affiliate(s) (with the allocation a ...