ASSET PURCHASE AGREEMENT

Exhibit 10.2

****Certain confidential information contained in this document, marked by brackets, has been omitted and filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (the “ Agreement ”) is entered into as of February 15 , 2007, by and between SiS Holding Limited, a company organized under the laws of the Cayman Islands (“ Buyer ”), ESS Technology, Inc., a California corporation (“ US Seller ”) and ESS Technology International, Inc., a Cayman corporation (“ Cayman Seller ,” and collectively with US Seller, “ Seller ”).

AGREEMENT

     In consideration of the mutual agreements, representations, warranties and covenants set forth below, Buyer and Seller agree as follows:

1. Definitions .

     1.1 Definitions . As used in this Agreement, the following terms shall have the following meanings:

          (a) “ Affiliate ” means, with respect to any Person, a Person directly or indirectly controlling, controlled by, or under common control with such Person. For these purposes, “ control ” shall refer to (i) the possession, directly or indirectly, of the power to direct the management or policies of the subject entity, whether through the ownership of voting securities, by contract, or otherwise, or (ii) the ownership, directly or indirectly, of at least fifty percent (50%) of the voting securities or other ownership interest of the subject entity, or in the event such entity resides in a country where such level of ownership is not permitted, the maximum percentage ownership therein allowed.

          (b) “ Acquisition Proposal ” means, other than the transactions contemplated by this Agreement and the SiS-US Agreement, any offer, proposal or inquiry relating to, or any Third Party indication of interest in (i) any acquisition, purchase or transfer, direct or indirect, of the Assets to be transferred and sold hereunder or of the tangible assets of Seller or the Transferred Employees to be transferred pursuant to the SiS-US Agreement, and (ii) any transaction, including without limitation, a merger, consolidation, share exchange, business combination, sale of substantially all assets of Seller, or tender offer, the consummation of which could reasonably be expected to impede, interfere with, prevent or materially delay the transactions contemplated by this Agreement or the SiS-US Agreement or dilute materially the benefits to Buyer or SiS-US of the transactions contemplated hereby or by the SiS-US Agreement.

          (c) “ Assigned Technology ” means the Owned Technology related exclusively to the Business existing as of the Closing Date and/or otherwise described in Schedule 1.1(c) hereto, which schedule indicates what part of the Assigned Technology is subject to the License Back in Section 7 herein below, and what part of the Assigned Technology is not subject to the License Back.

          (d) “ Assigned Technology Modification ” means any modification or enhancement to the Assigned Technology that is developed by Seller for a period of 6 months following the Effective Date.

          (e) “ Base Technology ” means all Owned Technology which is not itself Assigned Technology (because it is or may be embodied or incorporated in or is necessary or useful to design, develop, modify, enhance, manufacture, implement or otherwise exploit one or more Seller Products being retained by Seller), but which Owned Technology is necessary or useful to design, develop, modify, enhance, manufacture, implement or otherwise exploit the Assigned Technology for the Business or is embodied or incorporated in any design, configuration or combination which is part of or used in connection with the Assigned Technology for the Business. Base Technology includes, but is not limited to, the “ Sublicensable Base Technology ” listed on Schedule 1.1(e)(i) hereto, the “ Royalty-Bearing Base Technology ” listed on Schedule 1.1(e)(ii) hereto , the “ Referenceable Base Technology ” listed on Schedule 1.1(e)(iii) hereto, and any Assigned Technology Modification(s) and any Base Technology Modification(s).

          (f) “ Base Technology Modification ” means any modification or enhancement to the Base Technology that is developed by Seller within twelve (12) months following the Closing Date.

          (g) “ Business ” means the business of designing, developing, modifying and enhancing, manufacturing, having manufactured, marketing and distributing Products that are designed to: (i) support all current or future video and/or audio formats for play-back from optical or other media (except for applications in the Restricted Field of Use); or (ii) principally control blue-laser based optical drives, but which may also support red-laser based optical drives as a matter of backward compatibility, and all derivatives thereof, as well as Products designed to support any successor formats or standards, and the provision of services relating thereto.

          (h) “ Buyer Products ” means any Products designed, developed, modified, enhanced, manufactured, marketed and distributed by or on behalf of Buyer or an Affiliate that are primarily used in the Business, including all successor products and new versions thereof for use in the Business, and includes the provision of services related to such Products.

          (i) “ Closing ” means the consummation of the transactions contemplated hereby and “ Closing Date ” means the date of the Closing.

          (j) “ Code ” means the Internal Revenue Code of 1986, as amended.

          (k) “ Confidential Information ” means nonpublic information that a party to this Agreement (“ Disclosing Party ”) designates in writing as being confidential to the party that receives such information (“ Receiving Party ”). “ Confidential Information ” includes, without limitation, information in tangible or intangible form relating to and/or including released or unreleased Disclosing Party software or hardware products, the marketing or promotion of any Disclosing Party product, Disclosing Party’s business policies or practices, and information received from others that Disclosing Party is obligated to treat as confidential. Confidential Information which is disclosed in tangible form shall be marked as “confidential” or words of

similar import. Confidential Information which is disclosed verbally shall be designated as “confidential” by the Disclosing Party when disclosed. Notwithstanding the foregoing, the failure by the Disclosing Party to designate any tangible or intangible information as Confidential Information shall not give the Receiving Party the right to treat such information as free from the restrictions imposed by Section 6.17 of this Agreement if the circumstances would lead a reasonable person to believe that such information is Confidential Information. Except as otherwise indicated in this Agreement, the term “ Disclosing Party ” also includes all Affiliates of the Disclosing Party and, except as otherwise indicated, the term “ Receiving Party ” also includes all Affiliates of the Receiving Party. Confidential Information shall not include any information, however designated, that: (i) is or subsequently becomes publicly available without Receiving Party’s breach of any obligation owed to Disclosing Party; (ii) became known to Receiving Party prior to Disclosing Party’s disclosure of such information to Receiving Party pursuant to the terms of this Agreement without an obligation of confidentiality prior to the Disclosing Party’s disclosure; (iii) became known to Receiving Party from a source other than Disclosing Party other than by the breach of an obligation of confidentiality owed to Disclosing Party; or (iv) is independently developed by Receiving Party.

          (l) “ Consulting Agreement ” means each agreement between Seller and Buyer (or an Affiliate of Buyer) dated as of January 1, 2007, pursuant to which Buyer (or its Affiliate) agrees to provide consulting services to Seller to be performed by certain Transferred Employees in accordance with the terms thereof.

          (m) “ Domain Names ” means all Internet domain names owned by Seller or which Seller is authorized to license to Buyer, and which exclusively relate to the Assigned Technology or the Business, and/or those domain names that are otherwise identified on Schedule 1.1(m) hereto.

          (n) “ Exclusive Field of Use ” means the business of designing, developing, modifying and enhancing, manufacturing, having manufactured, marketing and distributing Products that are designed to support current or future video and/or audio formats for play-back from optical or other media (except for applications in the Restricted Field of Use), as well as Products designed to support any successor formats or standards, and the provision of services relating thereto.

          (o) “ GAAP ” means generally accepted accounting principles of the United States as set forth by the Financial Accounting Standards Board.

          (p) “ Governmental Authorizations ” means the permits, authorizations, consents or approvals of any Governmental Entity that are a condition to the lawful consummation of the transactions contemplated hereby listed on Schedule 1.1(p) hereto.

          (q) “ Governmental Entity ” means any court, or any federal, state, municipal or other governmental authority, department, commission, board, agency or other instrumentality domestic or foreign.

          (r) “ Intellectual Property Rights ” means any and all rights existing now or in the future under patent law (including, but not limited to the Patents), copyright law, industrial

design rights law, semiconductor chip and mask work protection law, moral rights law, trade secret law, trademark law (including, but not limited to the Marks), domain name law (including, but not limited to the Domain Names), unfair competition law, publicity rights law, privacy rights law, and any and all similar proprietary rights, and any and all applications for registration, registrations, letters patent, renewals, extensions, divisions, continuations, reissues, and restorations thereof, now or hereafter in force and effect anywhere in the world.

          (s) “ Knowledge ” means that which is known by a Person and that of which a Person should have constructive knowledge after conducting a reasonable examination of all matters relating thereto.

          (t) “ Licensed Technology ” means the Base Technology licensed to Buyer hereunder as well as any Third Party Technology licensed to Buyer hereunder.

          (u) “ Lien ” means any mortgage, pledge, lien, security interest, option, covenant, condition, restriction, encumbrance, charge or other third-party claim of any kind.

          (v) “ Marks ” means all trademarks and service marks owned by Seller or which Seller is authorized to license to Buyer, and which relate exclusively to the Assigned Technology or the Business, and specifically include the marks identified on Schedule 1.1(v) hereto.

          (w) “ Material Adverse Effect ” with respect to a Person means any event, change or effect that is materially adverse to the condition (financial or otherwise), properties, assets, liabilities, business, operations, results of operations, or prospects of such Person and its Affiliates, taken as a whole, or an effect which prevents or materially delays a Person’s ability to consummate the transactions contemplated by this Agreement.

          (x) “ Owned Technology ” means any Technology that is owned or exclusively licensed to Seller.

          (y) “ Patents ” means all patents owned by Seller or which Seller is authorized to license to Buyer, that, absent the licenses granted hereunder would be infringed upon by the exploitation of the Assigned Technology and/or the Base Technology in the Business, whether presently issued or issued in the future, and specifically including the patents identified in Schedule_1.1(y) , and any and all continuations, continuations-in-part, or divisions thereof.

          (z) “ Person ” means an individual, corporation, partnership, association, trust, government or political subdivision or agent or instrumentality thereof, or other entity or organization.

          (aa) “ Products ” means semiconductor products, or components, boards or assemblies incorporating such semiconductor products.

          (bb) “ Restricted Field of Use ” means the business of designing, developing, modifying and enhancing, manufacturing, having manufactured and distributing Products that (i) do not have HD video decoding capability; and (ii) are used or marketed for the purpose of

supporting standard definition DVD optical disc technologies that utilize red laser technology to read and write data, including desktop/portable DVD players, mini-combo DVD players, DVD home theater systems and automotive DVD players which utilize such technology.

          (cc) “ Seller Products ” means all current SD DVD Products of Seller, including all successor SD DVD Products and new SD DVD versions thereof.

          (dd) “ SiS-US Agreement ” means that certain Asset Purchase Agreement of even date herewith between Seller and Silicon Integrated Systems Corporation, a California corporation and an Affiliate of Buyer (“ SiS-US ”), pursuant to which SiS-US is acquiring substantially all the tangible assets of the Business, and either SiS-US or another Affiliate of Buyer has offered employment to certain individuals who have been involved in developing the Business for Seller.

          (ee) “ Taxes ” means all taxes, however denominated, including any interest, penalties or other additions to tax that may become payable in respect thereof, (i) imposed by any federal, territorial, state, local or foreign government or any agency or political subdivision of any such government, for which Buyer could become liable as successor to or transferee of the Business or the Purchased Assets or which could become a charge against or lien on any of the Purchased Assets, which taxes shall include, without limiting the generality of the foregoing, all sales and use taxes, ad valorem taxes, excise taxes, business license taxes, occupation taxes, real and personal property taxes, stamp taxes, environmental taxes, real property gains taxes, transfer taxes, payroll and employee withholding taxes, unemployment insurance contributions, social security taxes, and other governmental charges in the nature of a tax, and other obligations of the same or of a similar nature to any of the foregoing, which are required to be paid, withheld or collected, or (ii) any liability for amounts referred to in (i) as a result of any obligations to indemnify another person.

          (ff) “ Technology ” means technical information, software, software code, knowledge, semiconductor masks, topologies and architectures, layouts, schematics, databases, net lists, test data, test methodologies, test vectors, emulation and simulation tools and reports, development tools, interfaces, specifications, works of authorship, inventions and discoveries, and any and all Intellectual Property Rights pertaining thereto, and specifically includes any documentation or items referenced in any Schedules describing the Technology to be sold, licensed or otherwise transferred under this Agreement.

          (gg) “ Third Party ” means any Person other than Buyer or Seller or their respective Affiliates.

          (hh) “ Third Party Technology ” means Technology owned by a Third Party that is embodied or incorporated into the Assigned Technology or the Base Technology as of the Closing Date.

          (ii) “ Transferred Employee ” means any employee who was employed by Seller in the Business as of December 31, 2006, who received and accepted an offer of employment by Buyer or an Affiliate of Buyer, including without limitation SiS-US, or a designated co-employer of any of the foregoing (each, a “ Buyer Party ”), to commence work for

such Buyer Party effective as of 12:01 a.m. on January 1, 2007 and who transferred employment to Buyer Party pursuant to such offer. Transferred Employees shall not include any person on a disability leave of more than twenty-six (26) weeks.

          (jj) “ Transferred Third Party Technology ” means the Third Party Technology, listed on Schedule 1.1(jj) , the license of which shall be transferred to Buyer on the Closing Date.

          (kk) “ Transition Services Agreement ” means each agreement between Seller and Buyer (or an Affiliate of Buyer) dated as of January 1, 2007, pursuant to which Seller has agreed to provide Buyer (or its indicated Affiliate) with certain transition services in accordance with the terms thereof.

          (ll) “ Working Day ” means a day other than Saturday or Sunday and on which commercial banks are open for business in California and Taiwan.

2. Transfer of Assets to Buyer

     2.1 Purchased Assets .

          (a) Purchase and Sale . Subject to the terms and conditions of this Agreement, Seller hereby sells, assigns, grants, transfers, conveys and delivers (or causes to be sold, assigned, granted, transferred, conveyed and delivered) to Buyer, or to any Affiliate of Buyer designated by Buyer, and Buyer hereby purchases and accepts from Seller as of the Closing Date, free and clear of all Liens:

                (i) all of Seller’s right, title and interest existing as of the Closing Date in and to the Assigned Technology and all Intellectual Property Rights thereto (subject to the License-Back to Seller of certain rights pursuant to Section 7 herein below);

                (ii) all of Seller’s rights existing as of the Closing Date to the Transferred Third Party Technology, including licensed rights and express or implied warranties in favor of Seller (subject to the License-Back to Seller of certain rights pursuant to Section 7 herein below, if permitted by such Third Party);

                (iii) all of Seller’s causes of action, judgments, and claims or demands of whatever kind or description existing as of the Closing Date (whether known or unknown as of that date) arising out of or relating to the Assigned Technology and all Intellectual Property Rights relating thereto, and the rights conveyed under Section 2.1(a)(ii), other than such causes of action, judgments, and claims or demands arising under this Agreement;

                (iv) all of Seller’s right, title and interest existing as of the Closing Date in and to such other properties or assets that are listed on Schedule 2.1(a)(iv) (“ Other Assets ”); and

                (v) all goodwill associated with all of the foregoing, together with the right to represent to third parties that Buyer, together with its Affiliates, is the successor to the

Business.

The assets, properties, and rights to be conveyed, sold, transferred, assigned, and delivered to Buyer pursuant to this Section 2.1(a) are sometimes hereinafter collectively referred to as the “ Purchased Assets ”.

          (b) Existing Licenses . Seller previously has granted licenses to Third Parties to use the Assigned Technology as set forth in Schedule 2.1(b) , and Buyer takes the Assigned Technology subject to such licenses. Any executory obligations and any liabilities to Third Parties under such license agreements or arising out of such license agreements (“ Remaining License Obligations ”) shall remain the obligation of Seller. Seller agrees to provide reasonable assistance to Buyer, at Buyer’s expense and upon its request, to enforce the terms and conditions of such license agreements against any Third Party.

     2.2 Licensed Assets .

          (a) Sublicensable Base Technology License . In connection with the purchase and sale of the Purchased Assets hereunder, effective as of the Closing Date, and subject to the terms and conditions hereof, Seller hereby grants Buyer, under Seller’s Intellectual Property Rights in the Sublicensable Base Technology, any Base Technology Modifications thereof, and any Assigned Technology Modifications, a worldwide, perpetual, irrevocable license, with the right to sublicense :

                (i) to design, develop, modify, enhance and use, and to have any of the foregoing performed on its behalf, the Sublicensable Base Technology, any Base Technology Modifications thereof, and any Assigned Technology Modifications, in each instance in connection with the Business; and

                (ii) to manufacture, have manufactured, market, distribute and sell, and to have any of the foregoing performed on its behalf, Buyer Products.

The foregoing license is restricted solely for use in the Business. The foregoing license shall be exclusive in the Business as to Buyer and its Affiliates, non-transferable (except for transfers to Buyer’s Affiliates or successors in interest to the Business or to one or more successors in interest to any Buyer Product), and shall be royalty-free and fully paid up. The foregoing license may not be exercised or otherwise exploited by Buyer in the Restricted Field of Use. Seller shall retain all rights to the Sublicensable Base Technology outside of the Business.

          (b) Royalty-Bearing Base Technology License . In connection with the purchase and sale of the Purchased Assets hereunder, effective as of the Closing Date, and subject to the terms and conditions hereof, Seller hereby grants Buyer, under Seller’s Intellectual Property Rights in the Royalty-Bearing Base Technology and any Base Technology Modifications thereof, a worldwide, perpetual, non-sublicensable (except the right to sublicense to Buyer’s Affiliates and its and their respective OEMs, distributors and customers ) , irrevocable license:

                (i) to design, develop, modify, enhance and use, and to have any of

the foregoing performed on its behalf, the Royalty-Bearing Base Technology and any Base Technology Modifications thereof, in each instance in connection with the Business; and

                (ii) to manufacture, have manufactured, market, distribute and sell, and to have any of the foregoing performed on its behalf, Buyer Products.

The foregoing license is restricted solely for use in the Business. The foregoing license shall be non-exclusive, non-transferable (except for transfers to Buyer’s Affiliates or successors in interest to the Business or to one or more successors in interest to any Buyer Product), and shall be royalty-free and fully paid up (except for applications outside the Exclusive Field of Use, in which event the license shall be subject to payment of a royalty to be negotiated in good faith by the parties). Seller shall retain all rights to the Royalty-Bearing Base Technology except for the limited license granted herein.

          (c) Reference License . In connection with the purchase and sale of the Purchased Assets hereunder, effective as of the Closing Date, and subject to the terms and conditions hereof, Seller hereby grants Buyer a worldwide, perpetual, non-sublicensable (except the right to sublicense to Buyer’s Affiliates) irrevocable license to use and copy the Referenceable Base Technology and any Base Technology Modifications thereof solely for purposes of internal reference in connection with Buyer Products. The foregoing license shall be non-exclusive, non-transferable (except for transfers to Buyer’s Affiliates or successors in interest to the Business or to one or more successors in interest to any Buyer Product), and shall be royalty-free and fully paid up. The foregoing license may not be exercised or otherwise exploited in the Restricted Field of Use or in any way outside of the Business.

          (d) Patent License . Without limiting the generality of anything contained in this Agreement, effective as of the Closing Date, subject to the terms and conditions hereof, Seller hereby grants to Buyer, during the term of the Patents and under Seller’s rights to the Patents, a non-exclusive, non-transferable (except for transfers to Buyer’s Affiliates or successors in interest to the Business or to one or more successors in interest to any Buyer Product) and non-sublicensable (except for sublicenses to Buyer’s Affiliates and Buyer’s and its Affiliates’ respective OEMs, distributors and customers of Buyer Products), worldwide, perpetual, irrevocable, royalty-free and fully paid up license (the “ Patent License ”) to make (including the right to practice methods, processes and procedures), have made, use, lease, sell, offer for sale and import any Buyer Products embodying or made in accordance with any invention of the Patents. The foregoing license may not be exercised or otherwise exploited in the Restricted Field of Use or otherwise outside of the Business.

The assets, properties, Patents, and rights licensed and delivered to Buyer pursuant to this Section 2.2 are sometimes hereinafter collectively referred to as the “ Licensed Assets ”, and together with the Purchased Assets, the “ Assets ”.

     2.3 Certain Excluded Assets . Buyer agrees that the assets of Seller set forth on Schedule 2.3 shall be excluded from the Assets (the “ Excluded Assets ”).

     2.4 Third Party Technology . Seller shall use commercially reasonable efforts to obtain any consent required from any Third Party set forth on Schedule 2.4 hereto, to convey or

grant to Buyer Seller’s rights to Transferred Third Party Technology; provided that Seller shall not be obligated to pay any amounts to any third parties (other than amounts accrued but unpaid by Seller) that may be requested by such third parties in consideration for obtaining such consents. The consents set forth in Schedule 2.4 shall constitute “ Required Consents ” hereunder.

     2.5 Assumed Liabilities . Effective as of the Closing, Buyer (or its designated Affiliate(s), as the case may be) in accordance with Section 3.2 shall, without any further responsibility or liability of or recourse to Seller or any of Seller’s Affiliates, subsidiaries, stockholders, officers, directors, employees, agents, successors or assigns, absolutely and irrevocably assume, pay, perform and be liable and responsible for any and all of the following liabilities (collectively, the “ Assumed Liabilities ”):

          (a) all liabilities and obligations arising after the Closing Date with respect to the Purchased Assets, provided however, that all liabilities arising prior to the Closing Date with respect to the Purchased Assets and all unperformed or unmatured obligations and covenants of Seller incurred by Seller prior to the Closing Date with respect to the Purchased Assets shall remain the sole responsibility of Seller; and provided further that any claim arising after the Closing Date that would not have occurred but for the inaccuracy of a representation or warranty of Seller hereunder shall also remain the sole responsibility of Seller;

          (b) all liabilities and obligations arising after the Closing Date with respect to Transferred Third Party Technology set forth on Schedule 2.5 hereto, provided however, that all liabilities arising prior to the Closing Date with respect to the Transferred Third Party Technology and all unperformed or unmatured obligations and covenants of Seller incurred by Seller prior to the Closing Date with respect to the Transferred Third Party Technology shall remain the sole responsibility of Seller.

     2.6 Excluded Liabilities . Except for the Assumed Liabilities and any other liabilities specifically assumed pursuant to this Agreement, Buyer shall not assume and shall not be liable for, and Seller and its Affiliates shall retain and remain solely liable for and obligated to discharge, all of the debts, contracts, agreements, commitments, obligations and other liabilities of any nature whatsoever of Seller and its Affiliates, whether known or unknown, accrued or not accrued, fixed or contingent, including without limitation, the following (collectively, with the foregoing, the “ Excluded Liabilities ”):

          (a) Any liability for breaches by Seller or any of its Affiliates on or prior to the Closing Date of any contract (including without limitation any contracts relating to Third Party Technology), instrument or purchase order, or any liability for payments or amounts due under any contract (including without limitation any contracts relating to Third Party Technology), instrument, or purchase order on or prior to the Closing Date;

          (b) Any liability or obligation for Taxes attributable to or imposed upon Seller or any of its Affiliates, or attributable to or imposed upon the Assets for any period (or portion thereof) up to but excluding the Closing Date, other than transfer taxes, sales, value-added or other similar taxes on the Assets directly attributable to or arising from the transactions contemplated by this Agreement (for purposes of determining the amount of Taxes attributable to the period up to the Closing Date, the amount of any Taxes based on or measured by income

or receipts shall be determined based on a closing of the books as of the close of business on the day before the Closing Date, and the amount of other Taxes shall be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the day before the Closing Date and the denominator of which is the number of days in such entire taxable period);

          (c) Any liability or obligation for or in respect of any loan, other indebtedness for money borrowed, or account payable of Seller or any of its Affiliates, including any such liabilities owed to Affiliates of Seller;

          (d) Any liability or obligation arising as a result of any legal or equitable action or judicial or administrative proceeding initiated at any time, to the extent relating to any action or omission on or prior to the Closing Date by or on behalf of Seller or any of its Affiliates, including, without limitation, any liability for infringement of intellectual property rights, breach of product warranty, injury or death caused by products, or violations of federal or state securities or other laws;

          (e) Any liability or obligation arising on or prior to the Closing Date out of any “employee benefit plan,” as such term is defined by the Employee Retirement Income Security Act of 1974 (“ ERISA ”) or other employee benefit plans;

          (f) Any liability or obligation for making payments of any kind (including as a result of the sale of the Assets or as a result of the termination of employment by Seller of employees, or other claims arising out of the terms and conditions of employment with Seller, or for vacation or severance pay or otherwise) to employees of Seller or in respect of payroll taxes for employees of Seller;

          (g) Any liability of Seller incurred in connection with the making or performance of this Agreement and the transactions contemplated hereby;

          (h) Any liability of Seller arising out of the violation of or failure to comply with any environmental laws applicable to any aspect of the Business;

          (i) Any costs or expenses of Seller incurred in connection with shutting down, deinstalling and removing equipment not purchased by Buyer, and the costs associated with all contracts and agreements not assumed by Buyer; and

          (j) Any Remaining License Obligation.

     2.7 Purchase Price .

          (a) Subject to the performance by Seller of all of its obligations under this Agreement (including delivering all documents required to be delivered) at the Closing, in consideration of the acquisition of the Purchased Assets under Section 2.1 and the Base Technology licenses and Patent License granted under Section 2.2, Buyer agrees (i) to deliver to Seller evidence of Buyer’s instruction to its bank (“ Bank Instruction ”) to release funds within one (1) business day of the Closing Date in the amount of $9,450,000.00 to be wire transferred to

an account or accounts designated by Seller (the “ Initial Installment ”); (ii) within seven (7) business days of the date on which Seller, Buyer and Chinatrust Commercial Bank (Taiwan) (the “ Escrow Agent ”) shall have executed that certain Indemnity Escrow Agreement in substantially the form attached hereto as Exhibit A (the “Escrow Agreement”), to deposit on behalf of Seller into an account or accounts designated by Escrow Agent (the “ Escrow Fund ”) $2,000,000.00 in immediately available funds (the “ Escrow Consideration ” and together with the Initial Installment and the Employee Bonus Funds set forth in Section 2.8(a) below, the “ Immediate Consideration ”), which consideration shall be subject to the provisions of the Escrow Agreement and (iii) to assume the Assumed Liabilities. Also at such time as all Technology embodied in the Assigned Technology, Licensed Technology and Transferred Third Party Technology shall have been copied and certified by Buyer, Buyer shall deliver to Seller’s designated bank account an additional $2,000,000.00 (the “ Hold Back Amount ”, and together with the Immediate Consideration, the “ Purchase Price ”).

          (b) Upon Seller’s receipt of the Bank Instruction set forth in subsection 2.7(a)(i) above, Seller shall arrange to release within three (3) Working Days thereafter and return to Silicon Integrated Systems Corporation of Hsin-Chu, Taiwan, R.O.C., the sole shareholder of Buyer (“ Parent ”), the $1,500,000.00 previously paid by Parent to Seller as a good-faith fully refundable deposit (the “ Deposit ”).

          (c) The Purchase Price shall be allocated to the intellectual property (including, but not limited to, trademarks, trade names, patents, licenses, copyrights) allocated [*****] to the Cayman Seller and [*****] to the US Seller. For purposes of this allocation, no value is being attributed to goodwill or going concern, covenant not to compete or contingent or assumed liabilities. Each party agrees to report the federal, foreign, state, local and other Tax consequences of the transactions contemplated by this Agreement in a manner consistent with such allocation (including any modifications thereto as a result of any payments or other adjustments made after the Closing Date) and shall not take any position inconsistent therewith upon examination of any Tax return or report, or in any litigation, investigation or otherwise, unless otherwise required by a taxing authority. Each party shall cooperate in the timely filing of Forms 8594 (if required) with the Internal Revenue Service.

          (d) All payments made to Seller pursuant to this Agreement (including payments of the Immediate Consideration, the Escrow Consideration, future royalty payments or amounts from the Bonus Plan) shall be made free and clear of and without deduction or withholding for or on account of any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings of any kind, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Entity.

     2.8 Employee Retention Bonus Pool; Forfeited Bonuses .

          (a) In addition, within seven (7) business days of the date on which Seller, Buyer and the Escrow Agent shall have executed that certain Escrow Bonus Agreement substantially in the form attached hereto as Exhibit C , Buyer agrees to deliver to the Escrow Agent, or to an account or accounts designated by Escrow Agent, $ [*****] in immediately available funds (the “ Employee Bonus Funds ”) pursuant to which bonuses shall be paid to Transferred Employees in accordance with the terms of the Employee Retention Bonus Plan

attached hereto as Exhibit B (the “ Bonus Plan ”) and the provisions of the Bonus Escrow Agreement.

          (b) Transferred Employees who remain employed by the applicable Buyer Party on the first and second anniversaries of January 1, 2007 (each, a “ Bonus Payment Date ”) are eligible to receive bonuses allocated to such individuals under the Bonus Plan from the Employee Bonus Funds. However, amounts that would have been payable to any Transferred Employee who is no longer employed by the applicable Buyer Party on a Bonus Payment Date, and associated interest, if any, shall not be paid to the Transferred Employee and such forfeited bonus shall be split 50/50 between Buyer and Seller after deduction of: (i) any applicable escrow service fee under the Bonus Pool Escrow Agreement, (ii) taxes due on interest that has accrued on the Employee Bonus Funds, and (iii) all withholding fees and payroll taxes (including the Transferred Employees’ and employer’s portion of payroll taxes) owed to any Government Entity due to payment of bonuses under the Bonus Plan. The Buyer and Seller agree to treat only the portion of the payment, if any, that is paid to Seller from the Escrow Bonus Funds in the event of a failure by a Transferred Employee to remain employed as a contingent payment and an adjustment to the Purchase Price for federal, state and local income tax purposes.

3. Closing

     3.1 Closing . Subject to the terms and conditions of this Agreement, the Closing shall take place on such date, as soon as practicable after all conditions precedent in Sections 8 and 9 have been satisfied or waived, as the parties may agree (the “ Closing Date ”), but in any case, no later than February 28, 2007, provided however that the parties may mutually agree to extend the time permitted to effect the Closing beyond February 28, 2007.

     3.2 Actions at the Closing . On the Closing Date, Seller shall have delivered the Purchased Assets and the Licensed Assets to Buyer as follows. Seller shall have made available for download by Buyer via a restricted FTP site all source code or other electronic files embodied or included in the Assets (including all Seller files, libraries, binaries, object code, headers, modules, type definitions, project file settings, installation scripts, release notes, web pages, graphics, icons, color pallets, encryption keys, and scripts required to build and package the Technology comprising any part of the Assets, but excluding any third-party products or materials for which Seller has not obtained consent from the owner to transfer and assign such products or materials to Buyer hereunder) and all end-user documentation source (including all files, graphics, icons, snapshots, text, binaries, web pages, scripts, help files, help source, word documents, adobe acrobat documents and release notes). Seller shall have delivered the remaining Assets promptly to Buyer, each by placement on a restricted FTP site for download by Buyer, to the extent such Assets were downloadable, and otherwise by a manner that was mutually agreed upon by Buyer and Seller. All Intellectual Property Rights transferred by Seller hereunder together with their tangible embodiments shall be held physically and legally by Buyer. Buyer and Seller shall take such actions and execute and deliver such agreements, bills of sale, and other instruments and documents as necessary or appropriate to effect the transactions contemplated by this Agreement in accordance with its terms, including without limitation the following:

          (a) Bill of Sale; Assignment and Assumption Agreement . Seller shall deliver to Buyer a general Bill of Sale substantially in the form attached as Exhibit D and with respect to the Intellectual Property Rights in the Assigned Technology, an Assignment and Assumption Agreement substantially in the form attached as Exhibit E (collectively, the “ Transfer Documents ”) in each case duly executed by Seller, and in the aggregate assigning to Buyer all of Seller’s right, title and interest in and to the Purchased Assets existing as of the Closing Date. Buyer may designate one or more of its Affiliates as the recipient of certain of the Purchased Assets, and as the party to assume certain of the Assumed Liabilities (provided that Buyer remains liable therefor), in which case Seller shall transfer such Purchased Assets and Assumed Liabilities to Buyer or the Affiliate(s) designated by Buyer pursuant to such Transfer Documents.

          (b) Consideration . Buyer shall deliver a copy of the Bank Instruction regarding the payment of the Immediate Consideration to Seller.

          (c) Title . Seller shall provide reasonable evidence of valid title to such of the Purchased Assets as Buyer may reasonably request in writing prior to the Closing, in form and substance reasonably satisfactory to Buyer.

          (d) Third Party Consents and Assignments . Seller shall deliver to Buyer any assignments and the Required Consents it has obtained in respect of any of the Assets, duly executed by parties having the authority to so assign or consent to assign, in form and substance as Buyer shall reasonably request, as well as a written confirmation from such third parties that the Assets are in good standing.

          (e) Seller Documents . At the Closing, Seller shall deliver to Buyer any and all documents required to satisfy the conditions set forth in Section 9 of this Agreement that have not been waived by Buyer and any other closing documents reasonably requested by Buyer.

          (f) Buyer Documents . At the Closing, Buyer shall deliver to Seller any and all documents required to satisfy the conditions set forth in Section 8 of this Agreement that have not been waived by Seller and any other closing documents reasonably requested by Seller.

          (g) Post-Closing Actions . Subsequent to the Closing Date, Seller shall, and shall cause any Affiliate of Seller to, from time to time execute and deliver, upon the request of Buyer, all such other and further materials and documents and instruments of conveyance, transfer or assignment as may reasonably be requested by Buyer to effect, record or verify the transfer to and vesting in Buyer of Seller’s and any of Seller’s Affiliates’ right, title and interest in and to the Assets, free and clear of all Liens in accordance with the terms of this Agreement. Buyer, Seller and the Escrow Agent shall work diligently to finalize and execute the Indemnity Escrow Agreement and the Bonus Escrow Agreement on or before February 28, 2007, and within seven (7) days of the date on which the parties execute each of those agreements, Buyer shall deposit the Escrow Consideration and the Employee Bonus Funds, respectively, into a designated account or accounts with the Escrow Agent.

4. Representations and Warranties of Seller

     Each representation and warranty set forth below is qualified by any exception or disclosures set forth in the Seller Disclosure Schedule attached hereto, which exceptions specifically reference the Section(s) to be qualified. In all other respects, each representation and warranty set out in this Section 4 is not qualified in any way whatsoever, will not merge on Closing or by reason of the execution and delivery of any agreement, document or instrument at the Closing, will remain in force on and after the Closing Date, is given with the intention that liability is not confined to breaches discovered before Closing, is separate and independent and is not limited by reference to any other representation or warranty or any other provision of this Agreement, and is made and given with the intention of inducing the Buyer to enter into this Agreement. Except as otherwise set forth in the Seller Disclosure Schedule, Seller represents and warrants to Buyer as follows:

     4.1 Organization, Standing and Power . US Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of California, and Cayman Seller is a corporation duly organized, validly existing and in good standing under the laws of the Cayman Islands. Seller has the requisite corporate power and authority and all necessary permits, authorizations, consents, and approvals of all Governmental Entities to own, lease and operate its properties and to carry on the Business as now being conducted and as proposed to be conducted, except where the failure to have such power, authority and governmental approvals would not, individually or in the aggregate, have a Material Adverse Effect. Seller is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, have a Material Adverse Effect. US Seller has previously delivered to Buyer true and complete copies of the Articles of Incorporation and Bylaws of US Seller as presently in effect. Cayman Seller has delivered to Buyer true and complete copies of the Articles of Association and related charter documents of Cayman Seller as presently in effect.

     4.2 Authority . The execution and delivery of this Agreement (and all other agreements and instruments contemplated under this Agreement) by Seller, the performance by Seller of its obligations hereunder and thereunder, and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all necessary action by the Board of Directors and shareholders of Seller, and no other act or proceeding on the part of or on behalf of Seller or its shareholders is necessary to approve the execution and delivery of this Agreement and such other agreements and instruments, the performance by Seller of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby. The signatory officers of Seller have the power and authority to execute and deliver this Agreement and all of the other agreements and instruments to be executed and delivered by Seller pursuant hereto, to consummate the transactions hereby and thereby contemplated and to take all other actions required to be taken by Seller pursuant to the provisions hereof and thereof.

     4.3 Execution and Binding Effect . This Agreement has been duly and validly executed and delivered by Seller and constitutes, and the other agreements and instruments to be executed and delivered by Seller pursuant hereto, upon their execution and delivery by Seller, will constitute (assuming, in each case, the due and valid authorization, execution and delivery thereof by Buyer), legal, valid and binding agreements of Seller, enforceable against Seller in accordance with their respective terms.

     4.4 Consents and Approvals of Governmental Entities . Other than the Governmental Authorizations there is no requirement applicable to Seller to make any filing, declaration or registration with, or to obtain any permit, authorization, consent or approval of, any Governmental Entity as a condition to the lawful consummation by Seller of the transactions contemplated by this Agreement and the other agreements and instruments to be executed and delivered by Seller pursuant hereto or the consummation by Seller of the transactions contemplated herein or therein.

     4.5 No Violation . Neither the execution, delivery and performance of this Agreement and all of the other agreements and instruments to be executed and delivered pursuant hereto, nor the consummation of the transactions contemplated hereby or thereby, will, with or without the passage of time or the delivery of notice or both, (a) conflict with, violate or result in any breach of the terms, conditions or provisions of the Articles of Incorporation or Bylaws of Seller, (b) conflict with or result in a violation or breach of, or constitute a default or require consent of any Person (or give rise to any right of termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any contract, notice, bond, mortgage, indenture, license, franchise, permit, agreement, lease or other instrument or obligation to which Seller is a party or by which Seller or any of the Assets may be bound, (c) violate any statute, ordinance or law or any rule, regulation, order, writ, injunction or decree of any Governmental Entity applicable to Seller or by which any properties or assets of Seller may be bound, or (d) result in any cancellation of, or obligation to repay, any grant, loan or other financial assistance received by Seller from any Governmental Entity. No “bulk sales” legislation applies to the transactions contemplated by this Agreement.

     4.6 Consents . Schedule 4.6 sets forth each agreement, contract, license or other instrument binding upon Seller requiring a consent as a result of the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

     4.7 SEC Documents; Financial Information . Seller has delivered to Buyer a true and complete copy of all filings it has made with the Securities and Exchange Commission (“ SEC ”) since January 1, 2005 (the “ SEC Documents ”). The SEC Documents contain an audited consolidated balance sheet of Seller as of December 31, 2005 and the related audited consolidated statements of operations and cash flows for the year then ended and the Seller’s unaudited consolidated balance sheet as of September 30, 2006, and the related unaudited consolidated statements of operations and cash flows for the nine month period then ended. Seller has also provided its unaudited balance sheet as of September 30, 2006, a copy of which is set forth in the Seller Disclosure Schedule (the “ Last Balance Sheet ” and together with the SEC Documents, “ Seller’s Financials ”). Seller’s Financials, and the notes thereto are correct and complete in all material respects and were prepared in accordance with GAAP applied on a

consistent basis throughout the periods indicated and consistent with each other. Seller’s Financials present fairly the financial condition and operating results and cash flows of Seller as of the dates and during the periods indicated therein, subject, in the case of the unaudited statements, to normal year-end adjustments, which will not be material in amount or significance. Seller’s Financials accurately record the Assets as assets of Seller on each applicable balance sheets included in the SEC Documents as well as on the Last Balance Sheet. Since the date of the Last Balance Sheet, there has been no material change in Seller’s accounting policies and as of their respective filing dates, the SEC Documents complied in all material respects with the requirements of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and none of the SEC Documents nor the Last Balance Sheet contained any untrue statement of a material fact or omitted to state a material fact required to be state therein or necessary to make the statement made therein, in light of the circumstances in which they were made, not misleading, except to the extent corrected by a document subsequently filed with the SEC and provided to Buyer prior to the date hereof.

     4.8 No Undisclosed Liabilities . The Assets do not have any liability, Lien, indebtedness, obligation, expense, claim, deficiency, guaranty or endorsement of any type associated with them, whether accrued, absolute, contingent, matured, unmatured or other (whether or not required by GAAP to be reflected in the Seller’s Financials) which (i) have not been reflected in the Last Balance Sheet or the US Seller’s annual report on Form 10-K, or (ii) have not arisen in t