Exhibit 2.4

ASSET PURCHASE AGREEMENT

BY AND BETWEEN

XGI CAYMAN LTD.

AND

TRIDENT MICROSYSTEMS (FAR EAST) LTD.

EFFECTIVE AS OF JUNE 10, 2003

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this "AGREEMENT"), is entered into as of
June 10, 2003 (the "EFFECTIVE DATE"), by and between XGI CAYMAN LTD., a Cayman
Islands, B.W.I. corporation, having its principal place of business located at
Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, B.
W. I. ("BUYER"), and TRIDENT MICROSYSTEMS (FAR EAST) LTD., a Cayman Islands,
B.W.I. corporation, having its principal place of business located at Ugland
House, South Church Street, Grand Cayman, Cayman Islands, B.W.I. ("SELLER"). For
purposes of this Agreement, (i) "Buyer" shall refer to XGI Cayman Ltd. and not
to any Subsidiary or Affiliated Company of XGI Cayman Ltd. and (ii) "Seller"
shall refer to Trident Microsystems (Far East) Ltd. and not to any Subsidiary or
Affiliated Company of Trident Microsystems (Far East) Ltd.

RECITALS

WHEREAS, Seller's parent entity, Trident Microsystems, Inc., a Delaware
corporation ("TMI"), is engaged in, among other things, the business of
designing, developing and marketing graphics integrated circuits using the
intellectual property set forth on Schedule 3.1(a)(i) (hereinafter referred to
as the "GRAPHICS BUSINESS") and holds certain assets and properties relating to
and/or utilized in operating the Graphics Business (the "TMI-HELD GRAPHICS
ASSETS"); and

WHEREAS, in connection herewith, TMI has agreed to transfer all such
TMI-Held Graphics Assets to Seller as a contribution to Seller's capital prior
to the Closing (as defined herein); and

WHEREAS, Seller desires to sell, assign and transfer to Buyer, and
Buyer desires to purchase from Seller, as of the Separation Date, substantially
all of the assets and properties of Seller relating to and/or utilized in
operating the Graphics Business, including the TMI-Held Graphics Assets, in
exchange for the consideration and upon the terms and conditions set forth
herein; and

WHEREAS, it is the intent of the Buyer and Seller that, from and after
the Separation Date, (a) the operations of the Graphics Business shall be for
the benefit of the Buyer, and (b) Buyer shall be responsible for the obligations
of the Graphics Business incurred in the ordinary course of business;

NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements, representations, warranties, conditions and covenants contained
herein, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE 1

DEFINITIONS

1.1 ACTION. "ACTION" means any demand, action, suit,
countersuit, arbitration, inquiry, proceeding or investigation by or
before any federal, state, local, foreign or international governmental
authority or any arbitration or mediation tribunal.

1.2 AFFILIATE. "AFFILIATE" of any Person means a Person
that controls, is controlled by, or is under common control with such
Person. As used herein, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such entity, whether through ownership of
voting securities or other interests, by contract or otherwise.

1.3 ANCILLARY AGREEMENT. "Ancillary Agreement" means such
other agreements, documents or instruments as the parties may agree are
necessary or desirable in order to achieve the purposes hereof.

1.4 ASSETS. "ASSETS" means assets, properties and rights
(including goodwill), whether or not related to the Graphics Business,
wherever located (including in the possession of vendors or other third
parties or elsewhere), whether real, personal or mixed, tangible,
intangible or contingent, in each case whether or not recorded or
reflected or required to be recorded or reflected on the books and
records or financial statements of any Person, including the following:

(a) all accounting and other books, records and files
whether in paper, microfilm, microfiche, computer tape or disc, magnetic tape or
any other form;

(b) all apparatus, computers and other electronic data
processing equipment, automobiles, trucks, aircraft, rolling stock, vessels,
motor vehicles and other transportation equipment, special and general tools,
test devices, prototypes and models and other tangible personal property, but
excluding fixtures, machinery, equipment, furniture and office equipment;

(d) all interests in real property of whatever nature,
including easements, whether as owner, mortgagee or holder of a Security
Interest, lessor, sublessor, lessee, sublessee or otherwise;

(e) all interests in any capital stock or other equity
interests of any Subsidiary or any other Person; all bonds, notes, debentures or
other securities issued by any Subsidiary or any other Person; all loans,
advances or other extensions of credit or capital contributions to any
Subsidiary or any other Person; and all other investments in securities of any
Person;

(f) all license agreements, leases of personal property,
open purchase orders for raw materials, supplies, parts or services, unfilled
orders for the manufacture and sale of products and other Contracts, agreements
or commitments;

(g) all deposits, letters of credit and performance and
surety bonds;

(h) all written technical Information, data,
specifications, research and development Information, engineering drawings,
operating and maintenance manuals, and materials and analyses prepared by
consultants and other third parties;

(i) all Intellectual Property and licenses from third
Persons granting the right to use any Intellectual Property;

(j) all computer applications, programs and other
software, including operating software, network software, firmware, middleware,
design software, design tools, systems documentation and instructions;

(k) all cost Information, sales and pricing data,
customer prospect lists, supplier records, customer and supplier lists, customer
and vendor data, correspondence and lists, product literature, artwork, design,
development and manufacturing files, vendor and customer drawings, formulations
and specifications, quality records and reports and other books, records,
studies, surveys, reports, plans and documents;

(l) all prepaid expenses, trade accounts and other
accounts and notes receivables;

(m) all rights under Contracts or agreements, all claims
or rights against any Person arising from the ownership of any Asset, all rights
in connection with any bids or offers and all claims, choses in action or
similar rights, whether accrued or contingent;

(n) all rights under Insurance Policies and all rights in
the nature of insurance, indemnification or contribution;

(o) all licenses (including radio and similar licenses),
permits, approvals and authorizations which have been issued by any Governmental
Authority;

(p) cash or cash equivalents, bank accounts, lock boxes
and other deposit arrangements; and

(q) interest rate, currency, commodity or other swap,
collar, cap or other hedging or similar agreements or arrangements.

1.5 CONTRACTS. "CONTRACTS" means any contract, agreement,
lease, license, sales order, purchase order, instrument or other
commitment that is binding on any Person or any part of its property
under applicable law.

1.6 CONSENTS. "CONSENTS" means any approval, consent,
ratification, permission, waiver or authorization (including any
Governmental Approvals).

1.7 COURT ORDER. "COURT ORDER" means any judgment,
decision, consent decree, injunction, ruling or order of any foreign,
federal, state or local court or Governmental Authority that is binding
on any Person or its property under applicable Regulations.

1.8 GOVERNMENTAL APPROVALS. "GOVERNMENTAL APPROVALS"
means any notices, reports or other filings to be made, or any
consents, registrations, approvals, permits or authorizations to be
obtained from, any Governmental Authority.

1.9 GOVERNMENTAL AUTHORITY. "GOVERNMENTAL AUTHORITY"
means any federal, state, local, foreign or international court,
government, department, commission, board, bureau, agency, official or
other regulatory, administrative or governmental authority.

1.10 INFORMATION. "INFORMATION" means information, whether
or not patentable or copyrightable, in written, oral, electronic or
other tangible or intangible forms, stored in any medium, including
studies, reports, records, books, Contracts, instruments, surveys,
discoveries, ideas, concepts, know-how, techniques, designs,
specifications, drawings, blueprints, diagrams, models, prototypes,
samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or
under their direction (including attorney work product), and other
technical, financial, employee or business information or data.

1.11 INSURANCE POLICIES. "INSURANCE POLICIES" means
insurance policies pursuant to which a Person makes a true risk
transfer to an insurer.

1.12 INTELLECTUAL PROPERTY. "INTELLECTUAL PROPERTY" means
all domestic and foreign patents and patent applications, together with
any continuations, continuations-in-part or divisional applications
thereof, and all patents issuing thereon (including reissues, renewals
and re-examinations of the foregoing); design patents, invention
disclosures; mask works; copyrights, and copyright applications and
registrations; Web addresses, trademarks, service marks, trade names,
and trade dress, in each case together with any applications and
registrations therefor and all appurtenant goodwill relating thereto;
trade secrets, commercial and technical Information, know-how,
proprietary or confidential information, including engineering,
production and other designs, notebooks, processes, drawings,
specifications, formulae, and technology; computer and electronic data
processing programs and software (object and source code), databases
and documentation thereof; inventions (whether patented or not);
utility models; registered designs, certificates of invention and all
other intellectual property under the laws of any country throughout
the world.

1.13 LIABILITIES. "LIABILITIES" means all debts,
liabilities, guarantees, assurances, commitments and obligations,
whether fixed, contingent or absolute, asserted or unasserted, matured
or unmatured, liquidated or unliquidated, accrued or not accrued, known
or unknown, due or to become due, whenever or however arising
(including, without limitation, whether arising out of any Contract or
tort based on negligence or strict liability) and whether or not the
same would be required by generally accepted principles and accounting
policies to be reflected in financial statements or disclosed in the
notes thereto.

1.14 PERSON. "PERSON" means an individual, a partnership,
a corporation, a limited liability company, an association, a joint
stock company, a trust, a joint venture, an unincorporated organization
or a governmental entity or any department, agency or political
subdivision thereof.

1.15 REGULATIONS. "REGULATIONS" means any laws, statutes,
ordinances, regulations, rules, notice requirements, court decisions,
agency guidelines, principles of law and orders of any foreign,
federal, state or local government and any other Governmental
Authority, and including without limitation environmental laws, energy,
motor vehicle safety, public utility, zoning, building and health
codes, occupational safety and health regulations, and laws respecting
employment practices, employee documentation, terms and conditions of
employment and wages and hours.

1.16 SECURITY INTEREST. "SECURITY INTEREST" means any
mortgage, security interest, pledge, lien, charge, claim, option, right
to acquire, voting or other restriction, right-of-way, covenant,
condition, easement, encroachment, restriction on transfer or other
encumbrance of any nature whatsoever.

1.17 SEPARATION. "SEPARATION" means the sale, assignment
and/or transfer from Seller to Buyer, and Buyer's receipt, and
assumption of, substantially all of the Seller Assets and Seller
Liabilities (as defined below).

1.18 SEPARATION DATE. "SEPARATION DATE" means the
effective date and time of each transfer of property, assumption of
liability, license, undertaking, or agreement in connection with the
Separation, which shall be on or before June 30, 2003, or such other
date as Buyer and Seller may agree.

1.19 SUBSIDIARY. "SUBSIDIARY" of any Person means any
corporation or other organization whether incorporated or
unincorporated of which at least a majority of the securities or
interest having by the terms thereof ordinary voting power to elect at
least a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such Person or by any one
or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries; provided, however that no Person that is not directly or
indirectly wholly owned by any other Person shall be a Subsidiary of
such other Person unless such other Person controls, or has the right,
power or ability to control, that Person.

ARTICLE 2

SEPARATION; CLOSING

2.1 CLOSING; SEPARATION DATE. Unless otherwise provided in this
Agreement, or in any agreement to be executed in connection with this Agreement,
the Separation shall be effective (the "CLOSING") on the Separation Date, and
shall be held at the offices of Gray Cary Ware & Freidenrich LLP, 153 Townsend
Street, Suite 800, San Francisco, California 94133, or such other place as Buyer
and Seller shall agree.

ARTICLE 3

TRANSFER AND ASSUMPTION

3.1 TRANSFER OF BUYER ASSETS AND ASSUMPTION OF BUYER LIABILITIES.

(a) Transfer of Assets. Upon the terms and subject to the
conditions contained in this Agreement and pursuant to a Bill of Sale
substantially in the form attached hereto as Exhibit 3.1(a) (the "BILL OF
SALE"), effective on the Separation Date, Seller shall sell, assign, transfer,
convey and deliver (or will cause any applicable Subsidiary to assign, transfer,
convey and deliver) to Buyer, and Buyer shall accept, acquire and buy from
Seller, all of Seller's respective right, title and interest in the assets and
properties listed or described on Schedule 3.1(a)(i) attached hereto (including
all Intellectual Property rights listed thereon), all benefits under the
Contracts listed on Schedule 3.1(a)(ii) attached hereto and all payments due
under the accounts receivable listed on Schedule 3.1(a)(iii) attached hereto
(collectively, the "SELLER ASSETS").

(b) Assumption of Liabilities. Upon the terms and subject
to the conditions contained in this Agreement, effective on the Separation Date,
Buyer shall assume and agree faithfully to perform and fulfill (or will cause
any applicable Subsidiary of Buyer to assume, perform and fulfill), all the
Liabilities owed by Seller that are listed or described on Schedule 3.1(b)(i)
attached hereto and all obligations under the Contracts listed on Schedule
3.1(a)(ii) (collectively, the "SELLER LIABILITIES") in accordance with their
respective terms. Thereafter, Buyer shall be responsible (or will cause any
applicable Subsidiary to be responsible) for all Seller Liabilities held by
Seller, regardless of when or where such Liabilities arose or arise, or whether
the facts on which they are based occurred prior to, on or after the date
hereof, regardless of where or against whom such Liabilities are asserted or
determined or whether asserted or determined prior to the date hereof, and
regardless of whether arising from or alleged to arise from negligence,
recklessness, violation of law, fraud or misrepresentation by Seller or its
Affiliates or Buyer and its Affiliates or any of their respective directors,
officers, employees or agents. Notwithstanding the foregoing, (x) Buyer shall
not assume any Liabilities of Seller except as expressly set forth under this
Section 3.1(b) or otherwise in this Agreement or any Ancillary Agreement, (y) in
no event shall Buyer assume any agreements or obligations of Seller

or its Affiliates under this Agreement or any Ancillary Agreement unless
expressly set forth herein.

(c) Misallocated Assets. In the event that at any time or
from time to time (whether prior to, on or after the Separation Date), any party
hereto (or any Affiliates of any party hereto), shall receive or otherwise
possess any Asset that is allocated to any other Person pursuant to this
Agreement or any Ancillary Agreement, such party shall promptly transfer, or
cause to be transferred, such Asset to the Person so entitled thereto. Prior to
any such transfer, the Person receiving or possessing such Asset shall hold such
Asset in trust for any such other Person.

(d) Amendment of Schedules. By the mutual written consent
of the parties hereto, Schedules 3.1(a)(i), 3.1(a)(ii), 3.1(a)(iii) and
3.1(b)(i) hereto may be amended at any time on or prior to the Closing.

3.2 PURCHASE PRICE. As consideration of the sale, assignment,
transfer, conveyance and delivery of the Seller Assets by Seller to Buyer, Buyer
will pay and deliver to Seller, upon and simultaneously with the Closing on the
Separation Date, one hundred percent (100%) of its capital stock, which shall
equal one thousand shares (1,000) (the "PURCHASE PRICE").

3.3 METHODS OF TRANSFER AND ASSUMPTION.

(a) Terms of Other Ancillary Agreements Govern. To the
extent that the transfer of any Buyer Asset or the assumption of any Buyer
Liability is expressly provided for by the terms of any other Ancillary
Agreement, the terms of such other Ancillary Agreement shall effect, and
determine the manner of, the transfer or assumption. It is the intent of the
parties hereto that pursuant to Sections 3.1 and 3.2, the transfer and
assumption of all other Seller Assets and Seller Liabilities shall be made
effective as of the Separation Date; provided, however, that circumstances in
various jurisdictions outside the United States may require the transfer of
certain Seller Assets and the assumption of certain Seller Liabilities to occur
in such other manner and at such other time as the parties hereto shall agree.

(b) Mistaken Assignments and Assumptions. In addition to
those transfers and assumptions accurately identified and designated by the
parties hereto to take place but which the parties are not able to effect on or
prior to the Separation Date, there may exist (i) Assets that the parties hereto
discovered were, contrary to the agreements between the parties hereto, by
mistake or omission, transferred (or not transferred) to Buyer or (ii)
Liabilities that the parties hereto discover were, contrary to the agreements
between the parties hereto, by mistake or omission, assumed (or not assumed) by
Buyer. The parties hereto shall cooperate in good faith to effect the transfer
or re-transfer of such Assets and/or the assumption or re-assumption of such
Liabilities.

3.4 GOVERNMENTAL APPROVALS AND CONSENTS.

(a) Transfer In Violation of Laws. If and to the extent
that the valid, complete and perfected transfer, assignment or novation to Buyer
of any Seller Assets and Seller

Liabilities (or from the Buyer of any other Assets) would be a violation of
applicable laws or require any Consent(s) or Governmental Approval in connection
with the Separation, then, unless Seller shall otherwise determine, the
transfer, assignment or novation to or from the Buyer, as the case may be, of
such Seller Assets, Seller Liabilities or other Assets, respectively, shall be
automatically deemed deferred and any such purported transfer, assignment or
novation shall be null and void until such time as all legal impediments are
removed and/or such Consents or Governmental Approvals have been obtained;
provided, however, that if such covenants or Governmental Approvals have not
been obtained within one year of the Separation Date, the parties hereto will
use their reasonable commercial efforts to achieve an alternative solution in
accordance with the parties' intentions hereunder.

(b) Transfers Not Consummated On or Prior to Separation
Date. If the transfer, assignment or novation of any Seller Assets or Contracts
intended to be transferred or assigned hereunder, is not consummated prior to or
on the Separation Date, whether as a result of the provisions of Section 3.1(c)
or for any other reason, then the Person retaining such Buyer Asset shall
thereafter hold such Buyer Asset for the use and benefit, insofar as reasonably
possible, of the Person entitled thereto (at the expense of the Person entitled
thereto). In addition, the Person retaining such Buyer Asset shall take such
other actions as may be reasonably requested by the Person to whom such Buyer
Asset is to be transferred in order to place such Person, insofar as reasonably
possible, in the same position as if such Buyer Asset had been transferred as
contemplated hereby and so that all the benefits and burdens relating to such
Seller Assets (or other Assets, as the case may be), including possession, use,
risk of loss, potential for gain, and dominion, control and command over such
Seller Assets, are to inure from and after the Separation Date to the Buyer (or
the Seller, as the case may be). If and when the Consents and/or Governmental
Approvals, the absence of which caused the deferral of transfer of any Buyer
Asset pursuant to Section 3.1(c), are obtained, the transfer of the applicable
Buyer Asset shall be affected in accordance with the terms of this Agreement
and/or such other applicable Ancillary Agreement.

(c) Expenses. The Person retaining a Buyer Asset or
Contract due to the deferral of the transfer of such Buyer Asset or Contract
shall not be obligated, in connection with the foregoing, to expend any money
unless the necessary funds are advanced by the Person entitled to the Buyer
Asset, other than reasonable out-of- pocket expenses, attorneys' fees and
recording or similar fees, all of which shall be promptly reimbursed by the
Person entitled to such Buyer Asset.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

4.1 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby
represents and warrants to Seller, and agrees, that, except as set forth on the
Buyer Disclosure Schedule attached hereto as Schedule 4.1, which exceptions
shall be deemed to be representations and warranties as if made hereunder:

(a) Organization and Standing. Buyer is a corporation
duly organized and validly existing under, and by virtue of, the laws of the
Cayman Islands, B.W.I. and is in good standing under such laws. Buyer has the
requisite corporate power to own and operate its properties and Assets and to
carry on its business as presently conducted and as proposed to be conducted.
Buyer is qualified or licensed to do business as a foreign corporation and is in
good standing in every jurisdiction where the failure to so qualify would have a
material adverse effect on the Buyer's business. Buyer has furnished Seller or
its special counsel with true and complete copies of Buyer's corporate charter
and bylaws. These copies are true, correct and complete and contain all
amendments through the date hereof.

(b) Corporate Power. Buyer has all requisite legal and
corporate power to enter into this Agreement and the Ancillary Agreements, to
consummate the Separation and to carry out and perform its obligations under the
terms of this Agreement and the Ancillary Agreements.

(c) Authorization. All corporate action on the part of
Buyer, its officers, directors and stockholders necessary for (x) the transfer
and payment of the Purchase Price pursuant hereto and (y) the execution,
performance and delivery by Buyer of this Agreement and the Ancillary Agreements
have been taken or will be taken prior to the Separation hereunder. This
Agreement and the Ancillary Agreements are each valid and binding obligations of
Buyer enforceable against it in accordance with their terms except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting enforcement of creditor's rights
and rules or laws concerning equitable remedies.

(d) Litigation, etc. Except as set forth on Schedule
4.1(d) hereto, there are no Actions, suits, proceedings or investigations
pending or, to Buyer's knowledge, threatened against Buyer, nor, to Buyer's
knowledge, is there any basis therefor, and none which questions the validity of
this Agreement or the Ancillary Agreements or any action taken or to be taken in
connection herewith or therewith.

(e) Consent, etc. No Consent, Governmental Approval,
approval or authorization of, or designation, declaration or filing on the part
of Buyer is required in connection with the valid execution and delivery of this
Agreement or the Ancillary Agreements or the consummation or performance of any
other transaction contemplated hereby or thereby.

(f) Liabilities. Buyer has no material Liabilities and,
to the best of its knowledge, knows of no material contingent Liabilities not
disclosed in Schedule 4.1(f) except current Liabilities incurred in the ordinary
course of business which in the aggregate do not exceed $50,000.

accelerate the performance required by, or result in a right of termination or
acceleration under, (with or without the passage of time or the giving of notice
or both) any of the terms conditions or provisions of any material agreement,
Contract, obligation, promise or undertaking that is legally binding on Buyer or
(c) violate, conflict with, contravene or give any Person the right to exercise
any remedy or obtain any relief under any Regulation or Court Order.

4.2 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents
and warrants to Buyer, only with respect to itself, that, except as set forth on
the Seller Disclosure Schedule attached hereto as Schedule 4.2, which exceptions
shall be deemed to be representations and warranties as if made hereunder
(provided that the following representations shall not in any way limit or
restrict Seller from relying on the representations and warranties made by Buyer
in this Agreement):

(a) Organization and Standing. Seller is a corporation
duly organized and validly existing under, and by virtue of, the laws of the
Cayman Islands, B.W.I. and is in good standing under such laws. Seller has the
requisite corporate power to own and operate its properties and Assets and to
carry on its business as presently conducted and as proposed to be conducted.
Seller is qualified or licensed to do business as a foreign corporation and is
in good standing in every jurisdiction where the failure to so qualify would
have a material adverse effect on Seller's business.

(b) Corporate Power. Seller has all requisite right,
power and authority to enter into and perform Seller's obligations under this
Agreement and the Ancillary Agreements, and this Agreement and the Ancillary
Agreements constitute valid and binding obligations of Seller enforceable
against it in accordance with their terms except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application relating to or affecting enforcement of creditors' rights and rules
or laws concerning equitable remedies.

(c) Authorization. All corporate action on the part of
Seller, its officers, directors and stockholders necessary for (i) the
execution, performance and delivery by Seller of this Agreement and the
Ancillary Agreements, (ii) the transfer, assignment, conveyance and delivery of
the Seller Assets and Seller Liabilities pursuant hereto and (iii) the
performance of all other obligations of Seller hereunder and under the Ancillary
Agreements have been taken or will be taken prior to the Separation hereunder.
This Agreement and the Ancillary Agreements are each valid and binding
obligations of Seller enforceable against it in accordance with their terms
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application relating to or affecting
enforcement of creditor's rights and rules or laws concerning equitable
remedies.

(d) Litigation, etc. Except as set forth on Schedule
4.2(d) hereto, there are no Actions, suits, proceedings or investigations
pending or, to Buyer's knowledge, threatened against Seller relating to the
Graphics Business, nor, to Seller's knowledge, is there any basis therefor, and
none which questions the validity of this Agreement or the Ancillary Agreements
or any action taken or to be taken in connection herewith or therewith.

(e) Consent, etc. No Consent, Governmental Approval,
approval or authorization of, or designation, declaration or filing on the part
of Seller is required in connection with the valid execution and delivery of
this Agreement or the Ancillary Agreements or the consummation or performance of
any other transaction contemplated hereby or thereby.

(f) Liabilities. Other than the Seller Liabilities,
Seller has no material Liabilities relating to the Graphics Business and, to the
best of its knowledge, knows of no material contingent Liabilities relating to
the Graphics Business not disclosed in Schedule 4.2(f) except current
Liabilities relating to the Graphics Business incurred in the ordinary course of
business which in the aggregate do not exceed $50,000.

(g) No Conflict or Violation. Neither the execution,
delivery or performance of this Agreement or the Ancillary Agreements nor the
consummation of the transactions contemplated hereby or thereby, nor compliance
by Seller with any of the provisions hereof or thereof, will (a) violate or
conflict with any provision of Seller's corporate charter or bylaws, (b)
violate, conflict with, or result in or constitute a default under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, (with or without the passage of time
or the giving of notice or both) any of the terms conditions or provisions of
any agreement, Contract, obligation, promise or undertaking that is legally
binding on Seller or (c) violate, conflict with, contravene or give any Person
the right to exercise any remedy or obtain any relief under any Regulation or
Court Order.

(h) Liens and Encumbrances. The Seller Assets (as set
forth on Schedules 3.1(a)(i), 3.1(a)(ii) and 3.1(a)(iii) attached hereto) are
free of any liens, encumbrances or Security Interests.

(i) Title to Purchased Assets; Condition of Purchased
Assets. Except as set forth on Schedule 4.2(i)(i) hereof, Seller has, and will
transfer to Buyer, sole ownership of (and, in the case of real property, good
and marketable title to) the Seller Assets and upon the consummation of the
transactions contemplated hereby, Buyer will acquire sole ownership of (and, in
the case of real property, good and marketable title to) all of the Seller
Assets, free and clear of any liens, encumbrances or Security Interests. Except
as set forth on Schedule 4.2(i)(ii) hereof, all tangible Seller Assets and
properties which are part of the Seller Assets are in good operating condition
and repair and are usable in Seller's ordinary course of business as currently
conducted or as may be conducted in the future consistent with Seller's past
practice.

(j) Permits. Seller has all franchises, permits,
licenses, and any similar authority, which are in full force and effect,
necessary for the conduct of its business as now being conducted by it, the lack
of which could have a material adverse effect on the Seller Assets or
Liabilities, and owns or possess such permits free and clear of any liens,
encumbrances or other Security Interests. Seller is not in default in any
material respect under any of such franchises, permits, licenses, or other
similar authority which default could have a material adverse effect on the
Seller Assets or Liabilities.

(k) Sale of Products. Each product that has been
manufactured or sold by

Seller to any Person: (a) conformed and complied with the terms and requirements
of any applicable warranty or other Contract and with all applicable
Regulations, and (b) was free of any design defects, construction defects or
other defects or deficiencies at the time of sale. No product manufactured or
sold by Seller has been the subject of any recall or other similar action and,
to the knowledge of Seller, no event has occurred, and no condition or
circumstance exists, that could (with or without notice or lapse of time) give
rise to or serve as a basis for any such recall or other similar action relating
to any such product. There is no Action pending or, to the knowledge of Seller,
being threatened against Seller relating to any product manufactured or sold by
Seller in the Graphics Business which will or is reasonably likely to result in
any Liabilities, and, to the knowledge of Seller, no event has occurred, and no
condition or circumstance exists, that could (with or without notice or lapse of
time) give rise to or serve as a basis for any such Action.

(l) Performance of Services. All services that have been
performed by or on behalf of Seller that relate to the Seller Assets were
performed in conformity with the terms and requirements of all applicable
warranties and other Contracts and with all applicable Regulations. There is no
Action pending or, to the knowledge of Seller, being threatened against Seller
relating to any services performed by or on behalf of Seller in connection with
the Seller Assets which will or is reasonably likely to result in any
Liabilities, and, to the knowledge of Seller, no event has occurred, and no
condition or circumstance exists, that could (with or without notice or lapse of
time) give rise to or serve as a basis for any such Actions.

(m) Customers and Distributors. SCHEDULE 4.2(m) HEREOF
ACCURATELY IDENTIFIES, AND PROVIDES AN ACCURATE AND COMPLETE BREAKDOWN OF THE
BOOKINGS FROM, THE 10 LARGEST CUSTOMERS OF SELLER RELATED TO THE SELLER ASSETS
FOR THE CALENDAR YEARS 2002 AND 2003 (UP TO THE DATE OF THIS AGREEMENT). Seller
has not received any written notice or other written communication indicating
that any customer or other Person identified or required to be identified in
Schedule 4.2(m) hereof intends to cease dealing with Seller or otherwise reduce
the volume of business transacted by such Person with Seller below historical
levels, and to the knowledge of Seller, no such customer or other Person intends
to do so. Seller has not received any written notice or other written
communication indicating that any distributor of any of Seller's products
intends to cease acting as a distributor of such products or otherwise dealing
with Seller, and to the knowledge of Seller, no such distributor intends to do
so.

(n) Sufficiency of Purchased Assets. The Seller Assets,
including without limitation all benefits under the Contracts listed on Schedule
3.1(a)(ii) and all accounts receivable listed on Schedule 3.1(a)(iii), if any,
will enable Buyer to own and use the Seller Assets in the manner in which the
Seller Assets have been used prior to the date hereof, are currently being used
in the Graphics Business and are currently proposed by Seller to be used.

(o) Other Agreements. Seller has not entered into any
other agreement, Contract or arrangement relating to the sale or other
disposition of any of the Seller Assets other than with respect to sales of
Seller's inventory in the ordinary course of Seller's business as currently
conducted.

(p) Material Misstatements or Omissions. No
representations or warranties by Seller in this Agreement, nor any document,
exhibit, statement, certificate or schedule heretofore or hereafter furnished to
Buyer pursuant hereto, or in connection with the transactions contemplated
hereby, including without limitation the Ancillary Agreements and all exhibits
and schedules hereto and thereto, contains or will contain any untrue statement
of a material fact, or omits or will omit to state any material fact necessary
to make the statements or facts contained therein not misleading.

(q) Intellectual Property. Immediately prior to the
Closing, Seller, to its knowledge, will own, or have the right to use, which
right cannot be terminated without Seller's consent (or Seller can obtain the
right to use on reasonable commercial terms), all Intellectual Property or
proprietary rights necessary to its business as now conducted, and has not
received any communications (either oral or written) that it is infringing upon
or otherwise acting adversely to the right or claimed right of any person under
or with respect to any of the foregoing, and to Seller's knowledge, after
reasonable investigation, there is no basis for any such claim. There are no
outstanding options, licenses, liens, encumbrances or Security Interests (each,
an "ENCUMBRANCE" for purposes of this Section 4.2(r) only) of any kind relating
to any Intellectual Property necessary to Seller's business as now conducted,
nor is Seller bound by or a party to any Encumbrance with respect to any other
Person's or entity's Intellectual Property. Seller is not aware of any violation
by a third party of any of Seller's Intellectual Property or proprietary rights.
Seller has taken commercially reasonable measures to protect the secrecy,
confidentiality and value of all Intellectual Property necessary to Seller's
business as now conducted or proposed to be conducted. Seller does not
reasonably believe it is or will be necessary to utilize any inventions of any
of its or TMI's employees (or people it currently intends to hire) or
consultants created prior to their employment by or relationship with Seller and
which have not been assigned to Seller.

ARTICLE 5

CLOSING CONDITIONS

5.1 CONDITIONS TO CLOSING OF BUYER. The obligation of Buyer to
consummate the Separation at the Closing is subject to the fulfillment on or
prior to the Separation Date of the following conditions, any of which may be
waived in writing by Buyer:

(a) Accuracy of Representations. The representations and
warranties of Seller set forth in this Agreement shall have been accurate in all
material respects as of the date of this Agreement and shall be accurate in all
material respects as of the Separation Date as if made on and as of the
Separation Date and if the Separation Date is after June 30, 2003, then the
representations and warranties of Seller set forth in this Agreement shall have
been accurate in all material respects as of the date of this Agreement and
shall be accurate in all material respects as of June 30, 2003 as if made on and
as of June 30, 2003 (it being understood that, for purposes of determining the
accuracy of such representations and warranties, (i) all "material adverse
effect" qualifications and other materiality of qualifications contained in such
representations and warranties shall be disregarded and (ii) any update of or
modification to Seller Disclosure

Schedule made or purported to have been made after the date of this Agreement
shall be disregarded).

(b) Performance of Covenants. Each of the covenants and
obligations that Seller is required to comply with or to perform at or prior to
the Closing shall have been complied with or performed in all material respects.

(c) Consents. All (i) Consents (including without
limitation all Governmental Approvals, approvals or authorizations required in
connection with the valid execution and delivery of this Agreement and the
Ancillary Agreements), permits and waivers necessary or appropriate for
consummation of the transactions contemplated by this Agreement and (ii) all
Consents, substitutions, approvals or amendments required to assign all rights
and obligations under agreements, leases, licenses, other Contracts and other
obligations or Liabilities of any nature whatsoever that constitute Seller
Liabilities or to obtain in writing the unconditional release of all parties to
such arrangements other than Buyer, so that, in any such case, Buyer and its
Subsidiaries will be solely responsible for such Liabilities, shall have been
obtained, made or given and the same shall be in full force and effect as of the
Separation Date and not rescinded.

(d) No Material Adverse Change. Since the date of this
Agreement, there shall not have occurred any material adverse effect on the
Seller Assets or Seller Liabilities, and no event shall have occurred or
circumstance shall exist that, in combination with any other events or
circumstances, could reasonably be expected to have a material adverse effect on
the Seller Assets or Seller Liabilities.

(e) No Action. There shall not be pending or threatened
any Action: (i) challenging or seeking to restrain or prohibit the consummation
of the Separation or any of the other transactions contemplated by this
Agreement; (ii) which would materially and adversely affect the right of Buyer
to own the Seller Assets or operate the Graphics Business; (iii) seeking to
compel Buyer or Seller or any Subsidiary thereof to dispose of or hold separate
any material Seller Assets, as a result of the Separation or any of the other
transactions contemplated by this Agreement; or (iv) which, if adversely
determined, could have a material adverse effect on the Seller Assets or Buyer.

(f) Agreements and Documents. The following agreements
and documents shall have been delivered to Buyer, and shall be in full force and
effect, subject only to the Closing:

(i) all Ancillary Agreements to which
Seller is a party shall have been executed and delivered to Buyer by Seller;

(ii) a certificate, executed on behalf
of Seller by an executive officer of Seller, confirming that the conditions set
forth in Sections 5.1(a), (b), (c), (d) and (e) have been duly satisfied;

(iii) a copy of Seller's charter and the
bylaws (as amended through the Separation Date), certified by the Secretary of
Seller as true and correct copies thereof as of the Separation Date;

(iv) a copy of the resolutions of the
Board of Directors of Seller providing for the authorization of the Separation,
the approval of this Agreement and the Ancillary Agreements and the other
matters contemplated hereby, certified by the Secretary of Seller to be true,
complete and correct;

(v) good standing certificates issued
by the appropriate Cayman Islands, B.W.I. governmental and tax authorities,
dated within ten (10) days of the Separation Date with applicable "bring-down"
certificates dated as of the Separation Date;

(vi) the Bill of Sale and any
assignments necessary for the transfer of any patents set forth in Schedule
3(a)(i);

(vii) such other agreements, documents or
instruments as the Buyer and Seller may agree are necessary or desirable in
order to achieve the purposes hereof.

5.2 CONDITIONS TO CLOSING OF SELLER. The obligation of Seller to
consummate the Separation at the Closing is subject to the fulfillment on or
prior to the Separation Date of the following conditions, any of which may be
waived in writing by Seller:

(a) Accuracy of Representations. The representations and
warranties of Buyer set forth in this Agreement shall have been accurate in all
material respects as of the date of this Agreement and shall be accurate in all
material respects as of the Separation Date as if made on and as of the
Separation Date (it being understood that, for purposes of determining the
accuracy of such representations and warranties, (i) all "material adverse
effect" qualifications and other materiality of qualifications contained in such
representations and warranties shall be disregarded and (ii) any update of or
modification to the Buyer Disclosure Schedule made or purported to have been
made after the date of this Agreement shall be disregarded).

(b) Performance of Covenants. Each of the covenants and
obligations that Buyer is required to comply with or to perform at or prior to
the Closing shall have been complied with or performed in all material respects.

given and the same shall be in full force and effect as of the Separation Date
and not rescinded.

(d) No Action. There shall not be pending or threatened
any Action: (i) challenging or seeking to restrain or prohibit the consummation
of the Separation or any of the other transactions contemplated by this
Agreement; (ii) which would materially and adversely affect the right of Seller
to receive the Purchase Price; or (iii) seeking to compel Buyer or Seller or any
Subsidiary thereof to dispose of or hold separate any portion of the Purchase
Price, as a result of the Separation or any of the other transactions
contemplated by this Agreement.

(e) Agreements and Documents. The following agreements
and documents shall have been delivered to Seller, and shall be in full force
and effect, subject only to the Closing:

(i) all Ancillary Agreements to which
Buyer is a party shall have been executed and delivered to Seller by Buyer;

(ii) a certificate, executed on behalf
of Buyer by an executive officer of Buyer, confirming that the conditions set
forth in Sections 5.2(a), (b), (c) and (d) have been duly satisfied;

(iii) a copy of Buyer's charter and the
bylaws (as amended through the Separation Date), certified by the Secretary of
Buyer as true and correct copies thereof as of the Separation Date;

(iv) a copy of the resolutions of the
Board of Directors of Buyer providing for the authorization of the Separation,
the approval of this Agreement and the Ancillary Agreements and the other
matters contemplated hereby, certified by the Secretary of Buyer to be true,
complete and correct;

(vi) such other agreements, documents or
instruments as the Buyer and Seller may agree are necessary or desirable in
order to achieve the purposes hereof.

ARTICLE 6

COVENANTS AND OTHER MATTERS

6.1 OTHER AGREEMENTS. Seller and Buyer agree to execute and cause
to be

executed by the approprite parties and deliver, as appropriate, such other
agreements, instruments and other documents as may be necessary or desirable in
order to effect the purposes of this Agreement and the Ancillary Agreements.

6.2 FURTHER INSTRUMENTS. Without further consideration, Seller
will execute and deliver, and will cause its applicable Subsidiaries to execute
and deliver, to Buyer such other instruments of transfer, conveyance,
assignment, substitution and confirmation and take such action as Buyer may
reasonably deem necessary or desirable in order more effectively to transfer,
convey and assign to Buyer and confirm Buyer's title to all of the Seller
Assets, rights and other things of value contemplated to be transferred to Buyer
pursuant to this Agreement, the Ancillary Agreements, and any documents referred
to therein, to put Buyer in actual possession and operating control thereof and
to permit Buyer to exercise all rights with respect thereto (including, without
limitation, rights under Contracts and other arrangements as to which the
Consent of any third party to the transfer thereof has not yet been obtained).
At the request of Seller and without further consideration, Buyer will execute
and deliver, and will cause its applicable Subsidiaries to execute and deliver,
to Seller and its Subsidiaries all instruments, assumptions, novations,
undertakings, substitutions or other documents and take such other action as
Seller may reasonably deem necessary or desirable in order to have Buyer fully
and unconditionally assume and discharge the Seller Liabilities contemplated to
be assumed by Buyer under this Agreement or any document in connection herewith
and to relieve Seller and its affiliates of any Seller Liability or obligation
with respect thereto and evidence the same to third parties. Neither Seller nor
Buyer shall be obligated, in connection with the foregoing, to expend money
other than reasonable out-of-pocket expenses, attorneys' fees and recording or
similar fees. Furthermore, each party hereto, at the request of the other party
hereto, shall execute and deliver such other instruments and do and perform such
other acts and things as may be necessary or desirable for effecting completely
the consummation of the transactions contemplated hereby.

6.3 LIABILITIES. After the Closing, neither party shall be liable
to the other for breaches of representations or warranties herein, except that:
(i) Seller shall be liable to Buyer and its affiliates if any of the Seller
Assets described herein have not been transferred, in which case the obligation
of Seller shall be to cause the delivery of such Asset, or otherwise deliver the
benefit thereof and (ii) Seller shall be liable for liabilities arising out of
the Graphics Business and arising prior to June 30, 2003 other than Seller
Liabilities, which are being assumed by Buyer, and Buyer shall be liable for
liabilities arising out of the Graphics Business arising after June 30, 2003.
Notwithstanding anything set forth above, with respect to liabilities arising
from, or relating to, the XGIC Technology (as set forth in Schedule 3(a)(i)),
Seller will not be liable to Buyer in an amount in excess of $3,500,000.
Provided however, that any claim for damages under this Section 6.3 must be made
in writing within 12 months of the Closing Date.

6.4 PAYMENT OF EXPENSES. Except as otherwise provided in this
Agreement, the Ancillary Agreements or any other agreement between the parties
relating to the Separation, all costs and expenses of the parties hereto in
connection with the Separation, the preparation of this Agreement and the
Ancillary Agreements, and the transactions contemplated hereby and thereby,
shall be paid by Seller.

6.5 FOREIGN SUBSIDIARIES. Seller and Buyer shall cause each of
their foreign subsidiaries to execute such local transfer agreements,
assignments, assumptions, novations and other documents as shall be necessary to
effect the purposes of this Agreement with respect to their respective
operations outside the United States.

6.6 DISPUTE RESOLUTION.

(a) Mediation. If a dispute, controversy or claim
("DISPUTE") arises between the parties relating to the interpretation or
performance of this Agreement or the Ancillary Agreements, or the grounds for
the termination hereof, appropriate senior executives (e.g., at or above
director or V.P. level) of each party who shall have the authority to resolve
the matter shall meet to attempt in good faith to negotiate a resolution of the
Dispute prior to pursuing other available remedies. The initial meeting between
the appropriate senior executives shall be referred to herein as the "DISPUTE
RESOLUTION COMMENCEMENT DATE." Discussions and correspondence relating to trying
to resolve such Dispute shall be treated as confidential information developed
for the purpose of settlement and shall be exempt from discovery or production
and shall not be admissible. If such senior executives are unable to resolve the
Dispute within thirty (30) days from the Dispute Resolution Commencement Date,
and either party wishes to pursue its rights relating to such Dispute, then the
Dispute will be mediated by a mutually acceptable mediator appointed pursuant to
the mediation rules of JAMS/Endispute within thirty (30) days after written
notice by one party to the other demanding non-binding mediation. Neither party
may unreasonably withhold consent to the selection of a mediator or the location
of the mediation. Both parties will share the costs of the mediation equally,
except that each party shall bear its own costs and expenses, including
attorney's fees, witness fees, travel expenses, and preparation costs. The
parties may also agree to replace mediation with some other form of non-binding
or binding Alternative Dispute Resolution ("ADR").

(b) Arbitration. Any Dispute which the parties cannot
resolve through mediation within ninety (90) days of the Dispute Resolution
Commencement Date, unless otherwise mutually agreed, shall be submitted to final
and binding arbitration under the then current Commercial Arbitration Rules of
the American Arbitration Association ("AAA"), by three (3) arbitrators in Santa
Clara County, California. Such arbitrators shall be selected by the mutual
agreement of the parties or, failing such agreement, shall be selected according
to the aforesaid AAA rules. The arbitrators will be instructed to prepare and
deliver a written, reasoned opinion stating their decision within thirty (30)
days of the completion of the arbitration. The prevailing party in such
arbitration shall be entitled to expenses, including costs and reasonable
attorneys' and other professional fees, incurred in connection with the
arbitration (but excluding any costs and fees associated with prior negotiation
or mediation). The decision of the arbitrator shall be final and non-appealable
and may be enforced in any court of competent jurisdiction. The use of any ADR
procedures will not be construed under the doctrine of laches, waiver or
estoppel to adversely affect the rights of either party.

(c) Court Action. Any Dispute regarding the following is
not required to be negotiated, mediated or arbitrated prior to seeking relief
from a court of competent jurisdiction for a breach of any obligation of
confidentiality, infringement, misappropriation or misuse of any

Intellectual Property right, or any other claim where interim relief from the
court is sought to prevent serious and irreparable injury to one of the parties
or to others. However, the parties to the Dispute shall make a good faith effort
to negotiate and mediate such Dispute, according to the above procedures, while
such court action is pending.

(d) Continuity of Service and Performance. Unless
otherwise agreed in writing, the parties will continue to provide service and
honor all other commitments under this Agreement and all Ancillary Agreements
during the course of Dispute resolution pursuant to the provisions of this
Section 6.6 with respect to all matters not subject to such Dispute, controversy
or claim.

6.7 GOVERNMENTAL APPROVALS. To the extent that the Separation
requires any Governmental Approvals, the parties will use their reasonable
commercial efforts to obtain any such Governmental Approvals.

6.8 NO REPRESENTATION OR WARRANTY. Except as may expressly be set
forth herein or in any Ancillary Agreement, all Seller Assets to be transferred
to Buyer shall be transferred "AS IS, WHERE IS" and Buyer shall bear the
economic and legal risk that any conveyance shall prove to be insufficient to
vest in Buyer good and marketable title, free and clear of any lien, claim,
equity or other encumbrance.

6.9 COOPERATION IN OBTAINING NEW AGREEMENTS. Seller understands
that, prior to the Separation Date, Buyer has derived benefits under certain
agreements and relationships between Seller and third parties, which agreements
and relationships are not being assigned or transferred to Buyer in connection
with the Separation. Upon the request of Buyer, Seller agrees to make
introductions of appropriate Buyer personnel to Seller's contacts at such third
parties, and agrees to provide reasonable assistance to Buyer, at Seller's own
expense, so that Buyer may enter into agreements or relationships with such
third parties under substantially equivalent terms and conditions, including
financial terms and conditions, that apply to Seller. Such assistance may
include, but is not limited to, (i) requesting and encouraging such third
parties to enter into such agreements or relationships with Buyer, (ii)
attending meetings and negotiating sessions with Buyer and such third parties,
and (iii) participating in buying consortiums with Buyer. Seller also
understands that certain agreements between Seller and third parties which are
being assigned to Buyer in connection with the Separation may require the
consent of the applicable third party. Seller shall assist Buyer in seeking and
obtaining the consent of such third parties to such assignment. In no event will
Seller have any obligations hereunder after the first anniversary of the
Separation Date or following a change of control of Seller in which Seller is
not the surviving entity.

ARTICLE 7

MISCELLANEOUS

7.1 ENTIRE AGREEMENT. This Agreement, the Ancillary Agreements and
the exhibits and schedules referenced or attached hereto and thereto,
constitutes the entire agreement

between the parties with respect to the subject matter hereof and shall
supersede all prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter hereof.

7.2 GOVERNING LAW. This Agreement shall be construed in accordance
with and all Disputes hereunder shall be governed by the laws of the State of
California, excluding its conflict of law rules and the United Nations
Convention on Contracts for the International Sale of Goods. The Superior Court
of Santa Clara County and/or the United States District Court for the Northern
District of California shall have jurisdiction and venue over all Disputes
between the parties that are permitted to be brought in a court of law pursuant
to Section 6.6 hereof.

7.3 NOTICES. Notices, offers, requests or other communications
required or permitted to be given by either party pursuant to the terms of this
Agreement shall be given in writing to the respective parties to the following
addresses:

if to Seller:

Trident Microsystems (Far East) Ltd.
Attn: President
Unit 2-5, 5/F
Future Plaza
111-113 How Ming Street
Kwun Tong, Kowloon
Hong Kong

with a copy to:

Gray Cary Ware & Freidenrich LLP
Attn: J. Howard Clowes
153 Townsend Street, Suite 800
San Francisco, California 94107

if to Buyer:

XGI Cayman Ltd.
Attn: President
Ugland House, South Church Street
George Town, Grand Cayman
Cayman Islands, B. W. I.

or to such other address as the party to whom notice is given may have
previously furnished to the other in writing as provided herein. Any notice
involving non-performance, termination, or renewal shall be sent by hand
delivery, recognized overnight courier or, within the United States, may also be
sent via certified mail, return receipt requested. All other notices may also be
sent by fax, confirmed by first class mail. All notices shall be deemed to have
been given and received on the earlier of actual delivery or three (3) days from
the date of postmark.

7.4 PARTIES IN INTEREST. This Agreement, including the exhibits
and schedules hereto, and the other documents referred to herein, shall be
binding upon and inure solely to the benefit of each party hereto and their
legal representatives and successors, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.

7.5 COUNTERPARTS. This Agreement, including the exhibits and
schedules hereto, and the other documents referred to herein, may be executed in
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.

7.6 ASSIGNMENT. Neither party may assign this Agreement or any
rights or obligations hereunder, without the prior written consent of the other
party, and any such assignment shall be void; provided, however, either party
may assign this Agreement to a successor entity in conjunction with such party's
reincorporation, or in conjunction with a change of control event. Any permitted
assignee shall agree to perform the obligations of the assignor of this
Agreement, and this Agreement shall inure to the benefit of and be binding upon
any permitted assignee.

7.7 SEVERABILITY. If any term or other provision of this Agreement
or the exhibits or schedules attached hereto is determined by a nonappealable
decision by a court, administrative agency or arbitrator to be invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the fullest extent possible.

7.8 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement or the schedules or exhibits attached hereto are cumulative
to, and not exclusive of, any rights or remedies otherwise available.

7.9 AMENDMENT. No change or amendment will be made to this
Agreement except by an instrument in writing signed on behalf of each of the
parties to such agreement.

7.10 TERMINATION. This Agreement may be terminated prior to the
Separation Date (whether before or after approval of this Agreement or the
Separation by Buyer's or Seller's Board) by mutual written consent of Buyer and
Seller;

7.11 INTERPRETATION. The headings contained in this Agreement, in
any exhibit or schedule hereto and in the table of contents to this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized term used in any schedule or
exhibit but not otherwise defined therein, shall have the meaning assigned to
such term in this Agreement. When a reference is made in this Agreement to an
Article or a Section, Exhibit or Schedule, such reference shall be to an Article
or Section of, or an exhibit or schedule to, this Agreement unless otherwise
indicated.

7.12 CONFLICTING AGREEMENTS. In the event of conflict between this
Agreement and any other Ancillary Agreement or other agreement executed in
connection herewith, the provisions of such other agreement shall prevail (other
than as otherwise provided herein).

7.13 LIMITATION OF LIABILITY. IN NO EVENT SHALL SELLER OR ITS
AFFILIATES OR BUYER BE LIABLE TO BUYER OR ITS AFFILIATES OR SELLER FOR ANY
SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST
PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE)
ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

7.14 TRANSLATIONS. This Agreement may be translated into any other
language, provided, however, that in the event of any dispute with respect to
interpretation or construction of any terms of this Agreement, the English
language version shall control.

7.15 CURRENCY. All financial obligations originating from the terms
and conditions of this Agreement shall be denominated in United States dollars.

[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

WHEREFORE, the parties have signed this Asset Purchase Agreement
effective as of the Effective Date.

XGI CAYMAN LTD. TRIDENT MICROSYSTEMS (FAR EAST) LTD.
a Cayman Islands, B.W.I. corporation a Cayman Islands, B.W.I. corporation

By: /s/ Frank Lin By: /s/ Frank Lin

- ---------------------------------- ----------------------------------------

Name: Frank Lin Name: Frank Lin

Title: Director Title: President and Chief Executive
Officer

SCHEDULE 3.1(a)(i) SELLER ASSETS

For purposes of this Agreement, "SELLER ASSETS" shall mean (without
duplication) the following Assets (and all benefits under all Contracts listed
on Schedule 3.1(a)(ii) and all accounts receivable listed on Schedule
3.1(a)(iii)), except as otherwise provided for in any other Ancillary Agreement
or other express agreement of the parties:

(i) any claim or other right of Seller or Buyer that primarily relates to
the Graphics Business, whenever arising, against any Person other than Seller or
its Affiliates or Buyer, if and to the extent that (i) such claim or right
arises out of the events, acts or omissions occurring prior to or as of the
Separation Date (based on then existing law) and (ii) the existence or scope of
the obligation of such other Person as of the Separation Date was not
acknowledged, fixed or determined in any material respect, due to a dispute or
other uncertainty as of the Separation Date or as a result of the failure of
such claim or other right to have been discovered or asserted as of the
Separation Date. A claim or right meeting the foregoing definition shall be
considered a Buyer Contingent Gain regardless of whether there was any Action
pending, threatened or contemplated as of the Separation Date with respect
thereto. Notwithstanding the foregoing, none of (i) the proceeds of any
Insurance Policies, (ii) any reversal of any litigation or other reserve, (iii)
any matters relating to taxes shall be deemed to be a Buyer Contingent Gain or
(iv) or any claim or benefit resulting from the Neomagic litigation;

(ii) GRAPHICS INTELLECTUAL PROPERTY ASSETS TO BE TRANSFERRED TO SELLER FOR
TRANSFER TO XGI (the "XGIC TECHNOLOGY"):

I. PATENTS

- --------------------------------------------------------------------------------------------
TITLE NUMBER
- --------------------------------------------------------------------------------------------

Multiple Graphics Data Type Processing U.S. Letters Patent No.
System 5,943,064
- --------------------------------------------------------------------------------------------
Floating Point Complementary Depth Buffer U.S. Letters Patent No.
6,285,779
- --------------------------------------------------------------------------------------------
DIV - Depth Buffer U.S. Letters Patent No.
6,453,065
- --------------------------------------------------------------------------------------------
3D Accelerator Command Structure and Serial Number 09/442,512.
Method Abandoned
- --------------------------------------------------------------------------------------------
Multi Resolution Depth Buffer Serial Number 09/839,247
- --------------------------------------------------------------------------------------------
System and Method for Clearing Depth and Color Buffers Serial Number 10/341,842
in a Realtime Graphics Rendering System
- --------------------------------------------------------------------------------------------
Multiple Concurrent Display System U.S. Letters Patent No.
5,488,385
- --------------------------------------------------------------------------------------------

II. TRADEMARKS

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MARK CLASS NUMBER COUNTRY
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BLADE 16 Reg. No. 925668 Taiwan
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BLADE 9 Reg. No. 890834 Taiwan
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BLADE T64 9 App. No. 76/372649 United States
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BLADE XP 9 Reg. No. 2597583 United States
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BLADE XP2 9 App. No. 76/372826 United States
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BLADE3D 9 Reg. No. 2601508 United States
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BRIGHTPIXEL 9 App. No. 76/437121 United States
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COOLPOWER 9 App. No. 76/436852 United States
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CYBERALADDIN-P4 9 App. No. 76/372828 Unites States
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CYBERBLADE XP 9 App. No. 76/372760 United States
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CYBERBLADE XP2 9 App. No. 76/372659 Unites States
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PROVIDIA 9 Reg. No. 2129419 Unites States
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SMARTTILE 9 App. No. 76/436918 Unites States
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TRIDENT XP4 9 App. No. 76/400692 United States
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XP4 9 App. No. 76/402624 United States
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XP5 9 App. No. 76/502429 United States
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XP8 9 App. No. 76/502161 United States
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III. TECHNOLOGY

II. TECHNOLOGY

1. DIRECTX6.0 3D GRAPHICS ENGINE CORE (IN BLADE3D PRODUCT)

HIGH PERFORMANCE 3D ACCELERATOR
- Single Cycle Pipelined Engine
- Per Pixel Mip-Mapping
- Multiple Levels of Detail (LOD)
- 1/16th Sub-Pixel Precision
- Advanced 32-bit color rendering
- Perspective correct textures
- Advanced DirectX 6 support
- 4Kbyte texture cache
- DirectDrawTM acceleration
- Multiple buffering
- Up to 125 MHz clock
SETUP ENGINE
- 32-bit IEEE Floating point input data
- Slope and vertex calculation
- Back facing triangle culling

- 1/16 Sub-Pixel Positioning accuracy for better image quality
- Deep command list
- Flexible vertex buffers
- Triangle strips and fans

RENDERING ENGINE
- Diffused and specular lighting
- Gouraud and flat shading
- Full scene super sampling anti-aliasing
- OpenGL compliant blending for fog and depth-cue ing
- 16-bit Z-buffer

TEXTURING ENGINE
- 1/2/4/8-bits per pixel compact palletized textures
- 16/32-bits per pixel quality non-palletized textures
- Tri-linear, bi-linear, and point-sampled filtering
- DX6 anistropic filtering
- DX6 texture compression
- Mip-mapping with multiple Level-Of-Detail (LOD)
- Color keying for translucency

2D GUI ENGINE
- 8/15/16/24/32-bits per pixel color formats
- 256 Raster Operations (ROPs)
- BitBLTs, lines, polygons, fills, patterns, clipping, bit masking
- Panning, scrolling, clipping, color expansion, sprites

2. DIRECTX7.0 3D GRAPHICS ENGINE CORE (IN XP2 PRODUCT)

HIGH PERFORMANCE, DUAL-PIPE 3D GRAPHICS ENGINE
- Support DirectX 7.0, Microsoft graphics standard for Windows 2000
- Hardware support of Cubic mapping reflections, refractions and lighting
- Hardware support of environment and emboss bump mapping
- Hardware support of texture compression
- Hardware support of all data formats for setup processing
- Adaptive sharing of Transform & Lighting processing with CPU
- Up to 166 MHz clock

SETUP ENGINE
- Hardware interface to DirectX 7.0
- 32-bit IEEE floating point precision
- 1/16 Sub-Pixel Positioning accuracy for better image quality

RENDERING ENGINE
- Dual pixel pipeline
- Sinple-pass processing of diffused, specular lighting and fog effect
- Enhanced Gouraud shading and Phong-like environmental lighting
- Fast order-independent scene anti-aliasing
- Fully OpenGL compliant blending for fog and depth-cue ing
- Hidden surface removal with 16, 24, or 32-bit Z-buffer or W buffer
- Color format includes 16, 24, or 32-bit per pixel
- Supports 8-bit stencil buffer

TEXTURING ENGINE
- Single-pass processing of up to 4 texels per clock
- Single-pass Tri-linear, Bi-linear, and Anisotropic texture filtering
- Non-linear magnification and sharpen texture filtering
- Multi-format texture cache
- 1/2/4/8-bits per pixel compact palletized textures
- Pallete data format with 565, 1555, 4444 or 8888 for ARGB
- 16/32-bits per pixel quality non-palletized textures
- DX6 texture compression

- Mip-mapping with multiple Level-Of-Detail (LOD)
- Texture color keying & enhanced filtering for translucent objects

3. 128-BIT 2D GRAPHICS ENGINE CORE (IN XP2 PRODUCT)
- 8/15/16/24/32-bits per pixel color formats
- 256 Raster Operations (ROPs)
- BitBLTs, lines, polygons, fills, patterns, clipping, bit masking
- Panning, scrolling, clipping, color expansion, sprites

4. DIRECTX8.0 3D GRAPHICS ENGINE CORE (IN XP4 PRODUCT)

HIGH PERFORMANCE, QUAD-PIPE 3D GRAPHICS ENGINE
- Full DX7.0/DX8.0.
- OpenGL 1.2.1 with extensions.
- Windows 2000.

Performance Highlights
- Peak triangle rate = 25M triangles/s // at 250MHz
- Peak vector/line rate = 25M vectors/s.
- 4 pixel engines in parallel per clock.
- Peak tri-linear texture or two bilinear texture mapped pixel rate up
to 1000 M pixels /s.
- Peak texel rate = 2000 M texels /s.
- 3D Winbench 2000 score >= 150?

Function Highlights
- Plentiful primitives ( >= 20 types):
- Triangle, line, point and point sprite.
- list/strip/fan,
- indexed and non-indexed vertex buffers and
- immediate mode.
- Very flexible vertex format: any vertex data order and multiple vertex
buffers.
- Powerful TnL/Vertex Shader.
- Powerful texture functionality.
- Flexible Pixel Shader.

Advanced Technology
- Optimal depth buffer with very high precision.
- Advanced Z bandwidth reduction technology (save > 50% of Z).
- Two level texture caches to greatly save texel bandwidth.
- Z cache & color cache to save ( >20% total frame buffer bandwidth).

Other Functions
- Support rendering resolution up to 4K x 4K.
- - Support chunk based rendering.
- Two 128bit frame buffer ports.

Advanced Texture Functionality
- Eight 2D textures / four 3D/4D textures in single pass.
- Multiple 2D / 3D bump maps.
- Cube environment maps, 3D volume textures and projected 2D/3D
textures.
- Support any texture size up to 4K x 4K
- Mipmap level: 4Kx4K to 1x1.

- Rich texture formats (>= 20 types).

Vertex shader
- Vertex Transformation.
- Vertex blending / Skinning.
- Lighting with no limited light sources. Texture coordinates
generation.
- Cube map vector computation / sphere map etc.

Clip/cull/3D clipping/Rasterizer
- Back face culling.
- Primitive rejection outside of a frustum or viewport.
- Real 3D clipping against guardband or frustum and 8 user planes.
- Fast clipping in rendering engine.
- Drawing rule identical to MS and OpenGL.
- Two approaches to do edge/line anti-aliasing.
- Line style.
- DDA Line drawing identical to diamond exit rule.
- All fill modes and flat/Gouraud shading.
- Perspective corrections for both texture and color.

Depth/stencil
- All depth test functions.
- All stencil functions.
- 16/24 bpp floating/integer depth buffer with very high precision.
- 8 bpp stencil buffer.
- W buffer.
- Depth clipping per pixel.
- OpenGL Polygon offset/MS Z bias.

Texture formats
- ARGB8888 = 32bpp.
- ARGB565/1555/4444 = 16bpp.
- A8L8, L8.
- UV88.
- UVL556.
- DXT0 ~ DXT5.
- FXT1 ---- 3Dfx compressed format.
- 1/2/4/8bpp palettized textures.
- UYVY &YUY2.
- Others are S/W preprocessed.

Three Texture Key Modes
- MS key.
- Nearest key.
- Key with alpha. // MS second key method.

Texture Addressing Modes in three dimensions (UVW)
- Wrap/Repeat.
- Mirror.
- Mirror Once.

- Clamp.
- OpenGL border.

All Texture Filters
- Mipmap nearest / Bilinear / Trilinear.
- Anisotropic

5. DirectX9.0 3D graphics engine core (in XP8 product)

HIGH PERFORMANCE, HYBRID-PIPE 3D GRAPHICS ENGINE
- Full DX7.0/DX8.0/DX9.0.
- OpenGL 1.4
- Windows 2000/ Windows XP

PERFORMANCE HIGHLIGHT
- Peak triangle rate = 40M triangles/s // at 300MHz
- Peak vector/line rate = 40M vectors/s.
- 2x2 pixel engines in parallel per clock.
- 8 Stencil/Z operations in parallel per clock.
- Peak tri-linear texture or two bilinear texture mapped pixel rate up
to 1200 M texels /s. Peak texel rate = 2000 M texels /s.
- 3D Mark2003 score >= 2500

Function Highlights
- Plentiful primitives (>= 20 types):
- Triangle, line, point and point sprite.
- list/strip/fan,
- indexed and non-indexed vertex buffers and
- immediate mode.
- Very flexible vertex format: any vertex data order and multiple vertex
buffers.
- Powerful Vertex Shader 2.0.
- Powerful texture functionality.
- Flexible Pixel Shader 2.0.

Advanced Technology
- Optimal depth buffer with very high precision.
- Advanced Z bandwidth reduction technology (save > 50% of Z).
- Two level texture caches to greatly save texel bandwidth.

OTHER FUNCTIONS
- Support rendering resolution up to 4K x 4K.
- Support chunk based rendering.
- Two 128bit frame buffer ports.

ADVANCED TEXTURE FUNCTIONALITY
- Eight pairs of 2D textures / eight 4D textures in single pass.
- Sixteen texture samples and registers
- Eight bump loops for maximum four dependant reads
- Cube environment maps, 3D volume textures and projected 2D/3D
textures.
- Support any texture size up to 4K x 4K
- Mipmap level: 4Kx4K to 1x1.

- Rich texture formats (>= 20 types).

VERTEX SHADER 2.0
- Vertex Transformation.
- Vertex blending / Skinning.
- Lighting with no limited light sources.
- Two-side Lighting
- Texture coordinates generation.
- Cube map vector computation / sphere map etc.

RENDERING ENGINE
- Pixel Shader 2.0
- Up to four rendering target
- 12-bit Alpha-blending
- 10-10-10-2 color buffer
- Gamma corrected rendering

CLIP/CULL/3D CLIPPING/RASTERIZER
- Back face culling.
- Primitive rejection outside of a frustum or viewport.
- Real 3D clipping against guardband or frustum and 8 user planes.
- Fast clipping in rendering engine.
- Drawing rule identical to MS and OpenGL.
- Two approaches to do edge/line anti-aliasing.
- Line style.
- DDA Line drawing identical to diamond exit rule.
- All fill modes and flat/Gouraud shading.
- Perspective corrections for both texture and color.

Depth/stencil
- All depth test functions.
- All stencil functions.
- Two-side stencil
- 16/24 bpp floating/integer depth buffer with very high precision.
- 8 bpp stencil buffer.
- W buffer.
- Depth clipping per pixel.
- OpenGL Polygon offset/MS Z bias.

TEXTURE FORMATS

- ARGB8888 = 32bpp.
- ARGB565/1555/4444 = 16bpp.
- A8L8, L8.
- UV88.
- UVL556.
- DXT0 ~ DXT5.
- FXT1 ---- 3Dfx compressed format.
- 1/2/4/8bpp palettized textures.
- UYVY &YUY2.
- Others are S/W preprocessed.

THREE TEXTURE KEY MODES
- MS key.
- Nearest key.
- Key with alpha. // MS second key method.

TEXTURE ADDRESSING MODES IN THREE DIMENSIONS (UVW)
- Wrap/Repeat.
- Mirror.
- Mirror Once.
- Clamp.
- OpenGL border.

ALL TEXTURE FILTERS
- Mipmap nearest / Bilinear / Trilinear.
- Anisotropic
- High order filtering, bicubic filtering and up to 8x8 kernel filtering

6. VGA CORE
- Full DOS standard text mode and graphics mode support
- Extended graphics mode with 8 bit, 16(555 or 565)bit, 24bit and 32 bit
color depth
- 250Mhz RAMDAC with gamma correction
- Support up to 1600x1280 90Hz display mode

7. TFT I/F CONTROLLER
- Programmable LCD timing controller for VGA, XGA, SXGA, SXGA+ and UXGA
TFT panels
- RGB24 or RGB18 with dithering
- Content centering and expansion
- Integrated dual channel LVDS transmitter
- Advanced scaling engine

8. DSTN I/F CONTROLLER
- Support VGA and XGA DSTN panels
- Advanced error diffusion and frame rate control for up to true color
display

9. MULTI-VIEW DISPLAY ON CRT, LCD AND TV

- Multi-view for different/same images with independent refresh rates on
separate display(CRT, LCD or TV)
- MHS support for CRT+LCD or TV+LCD

10. SPREAD SPECTRUM LCD I/F
- Up to 3dB EMI reduction with programmable spread profile

11. ADVANCED MOBILE POWER MANAGEMENT
- - HW or SW suspend and standby mode supported by advanced PWM
- - PCIPM and ACPI support
- - Static and dynamic clock gating
- - AGP Busy/Stop and Intel Speed Step support

12. MPEG2/DVD HARDWARE ASSIST PLAYBACK
- Full DVD support with AC3 and sub-picture support
- Motion compensation and IDCT to offload CPU
- Hardware alpha blending for sub-picture
- Static Bob or Weave de-interlacing and video scaling
- Pan/scan and HD0 support
- Microsoft DXVA support

13. HOST INTERFACE
- 1X, 2X, 4X, and 8X AGP
- Execute mode for direct command, texture, video and DVD
- PCI bus mastering support up to 66Mhz
- DMA mastering with scatter gather
- PCI 2.2 compliant

14. DRAM CONTROLLER
- Support SDRAM or SGRAM with different configuration
- 16 bit, 32 bit, 64 bit or 128 bit data interface
- Single data rate(SDR) or dual data rate(DDR) interface support
- Multi-bank interlacing and burst mode for high bandwidth utilization
- Support up to 300Mhz clock frequency

15. INTERFACE FOR INTEGRATED NORTH BRIDGE

(iv) the following other Assets:

1. Inventory. Any inventory relating to the Graphics Business held by
Seller as of June 30, 2003.

2. See Schedule of fixed assets.

SCHEDULE 3.1(a)(ii) TRANSFERRED CONTRACTS

Upon the Separation, all benefits under the following Contracts shall
be transferred from Seller to Buyer as Seller Assets, and all obligations under
the following Contracts shall be assumed Buyer as Seller Liabilities, except as
otherwise provided for in any other Ancillary Agreement or other express
agreement of the parties:

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TITLE PARTIES DATE, TERM
- --------------------------------------------------------------------------------------------------

Distribution/
Representative License TMI and Inno Micro April 1, 1998
Agreement Corporation ?Auto renew (1 year term) ??
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April 1, 2000
Sales Representative TERMINATED (1 year term. No
Agreement TMFE and TTI auto-renew.)
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Sales Representative TMI and MARTEK/ July 1, 1998
Agreement ETS No term.
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Sales Representative GFX Div. of TMI and PCD July 1, 2002
Agreement Corp. 1 year term. no auto-renew.
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Sales Representative GFX Div. of TMI and Sept. 1, 2002
Agreement Breckenridge Technologies. No term.
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Distribution/ TMI and Ultima Electronics July 26, 2002
Representative Agreement Corp. 1 year w/ auto-renew.
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Sample purchase terms n/a n/a
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July 24, 2001
KAW Quote #QW214 TMI and KAW Design Inc. No term.
- --------------------------------------------------------------------------------------------------
May 31, 2001
Terminates upon last to expire
License Agreement TMI and Ultimedia of the patents.
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Feb. 4, 2003
Terminates upon earlier of
Consulting and completion of work or
Confidentiality Agreement TMI and Five Ten Technologies termination by TMI.
- --------------------------------------------------------------------------------------------------

In addition, all outstanding purchase orders and sales orders for products of
the Graphics Business outstanding as of June 30, 2003 shall be transferred to
Buyer.

SCHEDULE 3.1(a)(iii) TRANSFERRED ACCOUNTS RECEIVABLE

1. Accounts Receivable. Upon the Closing of the Transaction, all
payments due under the accounts receivable relating to the Graphics Assets
arising after June 30, 2003 shall be transferred from Seller to Buyer.

SCHEDULE 3.1(b)(i) SELLER LIABILITIES

For the purposes of this Agreement, "SELLER LIABILITIES" shall mean
(without duplication) the following Liabilities (and all obligations arising
under the Contracts listed on Schedule 3.1(a)(ii)), whether arising before, on
or after the Separation Date, except as otherwise provided for in any Ancillary
Agreement or other express agreement of the parties:

(i) All accounts payable arising after June 30, 2003.

(ii) Any liability associated with the NeoMagic litigation
will not be transferred from Seller to Buyer.

(iii) All warranty and support obligations arising from
products sold after June 30, 2003.

SCHEDULE 4.1 BUYER DISCLOSURE SCHEDULE

SCHEDULE 4.2 SELLER DISCLOSURE SCHEDULE

Section 4.1 (d): An affiliate of TMFE is currently engaged in litigation with
NeoMagic. This litigation or any obligations pursuant to this litigation will
not be transferred to Buyer in connection with this Agreement.

LIST OF EXHIBITS

(SUBJECT TO CHANGE)

EXHIBIT # EXHIBIT