PURCHASE AGREEMENT

1.

Definitions

7

2.

Sale and Purchase

16

2.1

Assets

16

2.2

Sale and Purchase of Assets

18

2.3

Transfer Agreements

18

2.4

Excluded Liabilities

19

2.5

Excluded Assets

20

2.6

Transfer of Title, Possession and Risk of Loss

20

2.7

Transfer of Employees

20

2.8

Transfer of Contracts to be performed in the Name of Seller

24

2.9

Licensed IP

26

3.

Consideration

27

3.1

Shares and Warrants

27

3.2

Delivery of Consideration Shares and Warrants

28

3.3

Payment of Cash Consideration

28

3.4

Delivery of Stockholders Agreement

28

3.5

Allocation

28

4.

Closing and Conditions Precedent

28

4.1

Closing

28

4.2

Conditions Precedent to Closing

29

4.3

Reasonable Best Efforts to Close

30

4.4

Right to Terminate this Agreement

30

4.5

Reserved

31

4.6

Closing Actions

31

4.7

Intercompany Financial Relationships

33

4.8

Guarantees

34

5.

Representations and Warranties of Seller

34

5.1

Ownership of Shares and Corporate Existence

34

5.2

No Conflicts

35

5.3

Consents and Approvals

36

5.4

Subsidiaries

36

5.5

The Annual Accounts

36

5.6

Sold Assets

37

5.7

Material Contracts

37

5.8

Intellectual Property

38

5.9

Reserved

39

5.10

Absence of Certain Changes

39

5.11

Environmental Compliance, Public Health and Workplace Safety

41

5.12

Compliance with Laws

41

5.13

Permits and Authorizations

41

5.14

Personnel

42

5.15

Litigation

42

5.16

Insurance

43

5.17

Tax and Social Security Matters

43

5.18

Proxies

43

5.19

Full Disclosure

44

5.20

No Other Warranties

44

6.

Representations and Warranties of TMI and Purchaser

44

6.1

Organization, Good Standing and Qualification

44

6.2

SEC Reports

45

6.3

Financial Statements

45

6.4

No TMI/Purchaser MAC

46

6.5

Authorization; Enforceable Agreement

46

6.6

Valid Issuance of Consideration Shares and Warrants

47

6.7

Capitalization

47

6.8

Compliance with Other Instruments

48

6.9

Registration Rights; Voting Rights

48

6.10

Compliance with Laws

49

6.11

Litigation

49

6.12

Taxes

49

6.13

Environmental Matters

50

6.14

Purchaser Due Diligence

50

7.

Breach of Warranties

50

7.1

Indemnification by Seller

50

7.2

Limitation of Liability

51

7.3

Third Party Claims

53

7.4

Indemnification by Purchaser

54

8.

Covenants until Closing

54

8.1

General

54

8.2

Access to Seller and the Product Lines

54

8.3

Restricted Actions

55

8.4

Maintenance of Insurance Policies

57

8.5

Resignation of Directors

57

8.6

Regulatory Filings

57

8.7

Nasdaq Notice; Listing of Shares

59

8.8

Applicable Securities Laws

59

8.9

Reservation of Common Stock; Issuance of Shares of Common Stock

59

9.

Covenant Not to Compete and Non-Solicitation of Employees

59

10.

Transitory Arrangements and Post Closing Covenants

61

10.1

Post Closing Services; Termination of Inter-Company Agreements

61

10.2

The Micronas Name and Domain Name

61

10.3

Insurance Matters

62

10.4

Assistance with respect to information and documents

62

10.5

Tax Matters; Preparation of Tax Returns and Audits

62

10.6

Additional Seller Covenant

63

11.

Confidentiality and Publicity

63

12.

Reserved

64

13.

Expenses and Transfer Taxes

64

13.1

Expenses

64

13.2

Transfer Taxes

64

14.

Notices

65

15.

Invalidity

65

16.

Waiver

65

17.

Entire Agreement

65

18.

Governing Law

66

19.

Arbitration

66

20.

Interpretation

66

Schedule A:

Schedule B:

Schedule C:

Schedule D:

Schedule E:

Schedule 2.1.1 a):

Schedule 2.1.1 b)(A):

Schedule 2.1.1 b)(B):

Schedule 2.1.1 b)(C):

Schedule 2.1.4:

Schedule 2.3 a):

Schedule 2.3 b):

Schedule 2.3 c):

Schedule 2.3 d):

Schedule 2.3 e):

Schedule 2.3 f):

Schedule 2.3 g):

Schedule 2.7.1:

Schedule 2.9:

Schedule 3.1:

Schedule 3.4:

Schedule 3.5:

Schedule 4.2 c):

Schedule 4.2 d):

Schedule 4.6.1:

Schedule 4.6.2:

Schedule 4.6.3 a):

Schedule 4.6.3 b):

Schedule 4.8:

Schedules for Section 5:

Schedule 10.1:

A.

Seller and its Affiliates are engaged in the design, manufacture, marketing, sale and distribution of cutting-edge integrated circuit and sensor system solutions for consumer and automotive electronics industries; the shares of Seller are listed on the SIX Swiss Exchange.

B.

Purchaser and its Affiliates design, develop and market digital television system-on-chip (SOC) solutions for the rapidly growing consumer electronics markets in digital television (LCD, PDP, High Definition, Digital CRT, Micro Display Projection) and AV Multimedia PCs; the shares of TMI are listed on NASDAQ.

C.

Seller and its Affiliates wish to sell, transfer and assign to Purchaser and its Affiliates, and Purchaser and its Affiliates wish to acquire, all right, title and interest in and to the Product Lines all for the consideration and upon the terms and subject to the conditions set out in this Agreement.

1.

Definitions

Unless the context expressly requires otherwise, the following terms, where capitalized in this Agreement, have the following meanings:

shall mean all obligations with respect to accounts payable and notes payable created or arising in respect of the Product Lines.

shall mean all trade accounts receivable, and all notes receivable or evidences of indebtedness payable, created or arising in respect of the sale of products from the Product Lines.

shall mean the employees of Micronas Semiconductor R&D (Shanghai) Co. Ltd., Shanghai, China; Micronas Taiwan Ltd., Taipei, Taiwan; Micronas South East Asia Holding PTE Ltd., Singapore; Micronas Korea Ltd., Seoul, Republic of Korea; Micronas Semiconductors Inc., San Diego, Cali-

fornia and Schaumberg, Illinois, USA; and Micronas Japan K.K., Tokyo, Japan, all as listed in Schedule A and who are actually employed by such entities at Closing, and provided such employees do not refuse to be transferred and are employed by the applicable Seller Subsidiary at Closing.

shall mean with respect to any specified Person, any other Person which directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such specified Person.

shall mean this Purchase Agreement including the Schedules hereto.

shall mean the annual accounts prepared in accordance with Seller Accounting Principles for each of the Transferred Companies as per December 31, 2008 as set out in Schedule B .

shall mean Micronas GmbH, Freiburg, Germany; Micronas Semiconductor R&D (Shanghai) Co. Ltd., Shanghai, China; Micronas Taiwan Ltd., Taipei, Taiwan; Micronas South East Asia Holding PTE Ltd., Singapore; Micronas Korea Ltd., Seoul, Republic of Korea; Micronas Semiconductors Inc., San Diego, California and Schaumberg, Illinois, USA; and Micronas Japan K.K., Tokyo, Japan.

shall mean any day on which banks in Zurich, Switzerland, are open for transaction of normal commercial business.

shall mean all information (i) disclosed in this Agreement including its Schedules and

(ii) provided in Seller’s virtual dataroom according to the index in Schedule C .

shall mean frame rate converter as currently produced by the Seller and its Affiliates.

shall mean (a) all issued patents, reissued or reexamined patents, revivals of patents, utility models, certificates of invention, registrations of patents and extensions thereof, regardless of country or formal name (collectively, Issued Patents ); (b) all published or unpublished nonprovisional and provisional patent applications, reexamination proceedings, invention disclosures and records of invention (collectively Patent Applications and, with the Issued Patents, the Patents ); (c) all copyrights, copyrightable works, semiconductor topography and mask work rights, including all rights of authorship, use, publication, reproduction, distribution, performance transformation, moral rights and rights of ownership of copyrightable works, semiconductor topography works and mask works, and all rights to register and obtain renewals and extensions of registrations, together with all other interests accruing by reason of international copyright, semiconductor topography and mask work conventions (collectively, Copyrights ); (d) all trademarks, registered trademarks, applications for registration of trademarks, service marks, registered service marks, applications for registration of service marks, trade names, registered trade names and applications for registrations of trade names (collectively, Trademarks ) and domain name registrations; (e) all technology, ideas, inventions, designs, proprietary information, data, manufacturing

and operating specifications, know-how, formulae, trade secrets, technical data, hardware, software and processes (collectively, Know-How ); and (f) all other intangible assets, properties and rights (whether or not appropriate steps have been taken to protect, under applicable law.

shall mean any federal, state, cantonal, provincial, local or national statute, law, regulation, rule, code, order or other requirement or rule of law.

shall mean any debt, obligation, duty, loss, damages, cost, expense (including reasonable attorney’s fees), or liability of any nature (including any unknown, undisclosed, unmatured, unaccrued, unasserted, contingent, indirect, conditional, implied, vicarious, derivative, joint, several or secondary liability), regardless of whether such debt, obligation, duty or liability would be required to be disclosed on a balance sheet prepared in accordance with generally accepted accounting principles and regardless of whether such debt, obligation, duty or liability is immediately due and payable.

shall mean a material adverse effect on (a) the condition (financial or otherwise) of properties, assets, Liabilities, business, operations or results of operations of Seller, the Asset Seller Companies, the Transferred Companies or the Product Lines, individually or in the aggregate, all as related to the Product Lines; or (b) the ability of Seller and its Affiliates to consummate the transactions contemplated by this Agreement or otherwise perform their obligations under this Agreement, other than in each

case of (a) and (b) an Excluded Matter. Excluded Matter means any one or more of the following: (i) the effect of any change in the United States or European or other relevant economies or securities or financial markets in general; (ii) the effect of any change that generally affects any industry in which Seller, the Asset Seller Companies or the Transferred Companies operate; (iii) the effect of any change arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway as of the date hereof; (iv) the effect of any action taken by Purchaser or its Affiliates with respect to the transactions contemplated by this Agreement; (v) the effect of any changes relating to the press release of February 5, 2009 as attached in Schedule D ; (vi) the effect of any changes in applicable Laws; or (vii) any effect resulting from the announcement of this Agreement, compliance with terms of this Agreement or the consummation of the transactions contemplated hereby.

shall mean Micronas GmbH, Hans-Bunte-Strasse 19, 79108 Freiburg im Breisgau, Germany.

shall mean the premises located at Frankenthaler Strasse, Munich, Germany rented by Micronas GmbH, an Affiliate of Seller, but only as such premises (and Transferred Employees and assets) relate to the Product Lines; and such definition shall expressly exclude the SOC Product Line.

shall mean the Nasdaq Global Select Market.

or similar phrases, shall mean the ordinary course of business prior to the announcement by Seller on February 5, 2009, pursuant to which Seller announced the closing and/or potential sale of its and its Affiliates’ consumer electronics business, as set forth in the press release of February 5, 2009 attached in Schedule D .

shall mean the parties to this Agreement; provided, however, that with respect to TMI, TMI shall only be considered a “Party” with respect to the joint and several undertaking on the signature page hereto and Sections 3.4, 4.3, 4.6.2, 4.6.3(d), 6, 8.7, 8.8, 8.9, 11 and 13-20.

shall mean any individual, corporation, partnership, firm, association, unincorporated organization or other entity.

shall mean the following product lines of Seller and its Affiliates, including the business of designing, manufacturing, marketing, sale and distribution of the products of the following product lines as conducted on the date hereof: (i) FRC product line comprising integrated circuit products with frame-rate-converter function using motion-estimation, motion-compensation technology for use in consumer TV, (ii) demodulator (DRX) product line comprising integrated circuit products for demodulation of analog/digital terrestrial and cable TV signals), and (iii) product line comprising integrated circuit products demodulating audio broadcast IF signals and/or performing audio de-

coding, audio baseband processing for TVs receiving analog and/or digital broadcast signals, and integrated circuit products implementing universal serial bus (USB) compliant audio converters (CODEC); provided that, for the avoidance of doubt, the product line set forth in clause (iii) of this definition shall include, without limitation, the audio products sold by Seller and its Affiliates to Logitech International S.A. and its affiliates.

shall mean all reports, returns (including information returns, estimates and amended returns), declarations, claims for refund, statements or other information required to be supplied to a taxing authority in connection with Taxes.

shall mean the actual knowledge of the Board of Directors of Seller and of Seller’s senior executive management comprising Wolfgang Kalsbach, Manfred Häner, Hans Jürgen Desor, Tim Vehling, and Dirk Wieberneit, after reasonable inquiry.

shall mean the date on which this Agreement has been signed by both Parties.

shall mean the accounting principles applied by for the Product Lines which are based on and in compliance with the International Financial Reporting Standard (IFRS).

shall mean the system-on-chip product line of Seller and its Affiliates.

shall mean with respect to any Person of which such Person, either directly or through or together with any other Subsidi-

ary of such Person, owns more than 50% of the voting power.

shall mean all taxes, levies, duties, charges, fees, assessments and withholdings of any nature together with any interest and any penalties or additions to tax imposed by any taxing authority with respect thereto, including any payments to be made under the applicable social security laws.

shall mean a material adverse effect on (a) the condition (financial or otherwise) of properties, assets, Liabilities, business, operations or results of operations of TMI or Purchaser, individually or in the aggregate; or (b) the ability of TMI and Purchaser to consummate the transactions contemplated by this Agreement or otherwise perform their obligations under this Agreement, other than in each case of (a) and (b) TMI/Purchaser Excluded Matter. TMI/Purchaser Excluded Matter means any one or more of the following: (i) the effect of any change in the United States or European or other relevant economies or securities or financial markets in general; (ii) the effect of any change that generally affects any industry in which TMI or Purchaser operate; (iii) the effect of any change arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway as of the date hereof; (iv) the effect of any action taken by Seller or its Affiliates with respect to the transactions contemplated by this Agreement; (v) the effect of any changes in applicable Laws; or

(vi) any effect resulting from the announcement of this Agreement, compliance with terms of this Agreement or the consummation of the transactions contemplated hereby.

shall mean the actual knowledge of the Board of Directors of TMI or Purchaser and of TMI’s and Purchaser’s respective senior executive management comprising Sylvia Summers Couder and Pete Mangan, after reasonable inquiry.

shall mean any of the following markets or exchanges on which the Common Stock of TMI is listed or quoted for trading on the date in question: the NYSE Alternext, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

shall mean all employees of Micronas GmbH listed in Schedule E and whose employment relationships shall be transferred to Purchaser, or a designee, in connection with the transfer of the Assets and the Product Lines, provided such employees do not refuse to be transferred and are employed by Micronas GmbH at Closing.

shall mean Trident Microsystems, Inc., 3408 Garrett Drive, Santa Clara, CA 95054-2803, USA, the owner of 100% of the shares of Purchaser.

shall mean, for any trading day, the price determined by the first of the following clauses that applies: (a) if the Common Stock of TMI is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock of TMI for such date (or the nearest preceding date) on the Trading Market on which the Common Stock of TMI is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock of TMI for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock of TMI is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock of TMI are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock of TMI so reported, or (d) in all other cases, the fair market value of a share of Common Stock of TMI as determined by an independent appraiser selected in good faith by the Board of Di-rectors of TMI.

2.

Sale and Purchase

2.1

Assets

2.1.1

For the purpose of this Agreement, the Sold Assets shall refer to:

for the conduct of the Product Lines ( Equipment ), including, without limitation, the equipment, fixtures and tooling listed in Schedule 2.1.1 a) , which schedule Seller has made reasonable best efforts to make accurate in all material respects (provided, that Seller shall, prior to Closing, provide an updated Schedule 2.1.1 a), which updated schedule shall be subject to the reasonable satisfaction of Purchaser, to correctly reflect the Equipment);

b)

all Intellectual Property relating exclusively to the Product Lines owned by Seller, the Asset Seller Companies, the Transferred Companies and/or any other Seller Affiliate, which Intellectual Property shall include, the Issued Patents and Patent Applications, in particular those set forth in Schedule 2.1.1 b)(A) , the Copyrights, in particular those set forth on Schedule 2.1.1 b)(B) , the Trademarks, in particular those set forth on Schedule 2.1.1 b)(C) and the Know-How ( Transferred IP ). To the extent that a transfer of Intellectual Property is not possible (e.g. German copyrights), Seller grants Purchaser a sole and exclusive, worldwide, perpetual, irrevocable, fully assignable, royalty-free license including the right to grant sublicenses trough multiple tiers to use such Intellectual Property for all purposes in connection with the Product Lines. Such rights that cannot be transferred by virtue of law but only be licenses will also be deemed to constitute Transferred IP. For the avoidance of doubt, any Intellectual Property of Seller and its Affiliates which is not exclusively used for the Product Lines shall not be deemed to be Transferred IP; and

c)

all business and financial records relating to the Product Lines, including all sales materials, customer files, service records, product defect and traceability records, equipment certification and calibration records, pricing information, historical and ongoing business plans, development roadmap documents, training materials, forms and all other documentation related to the Product Lines ( Files );

a)

Micronas Holland Holding B.V., Nijmegen, the Netherlands; and

b)

Micronas Holland B.V., Nijmegen, the Netherlands.

The capitalization and the shareholders of the Transferred Companies are set out in Schedule 5.1 .

a)

local share purchase agreement between Seller in its own name and Purchaser or its designee regarding the transfer of 100% of the shares of Micronas Holland Holding B.V., Nijmegen, the Netherlands, referred to in Schedule 5.1 to be signed and executed at the Closing substantially in the form set forth in Schedule 2.3 a) ;

b)

one or more local asset purchase agreement(s) between Seller in its own name, the Asset Seller Companies and Purchaser or its designee regarding the transfer of the Assets, the Assumed Liabilities and the Transferred Employees and Additional Transferred Employees to be signed and executed at the Closing substantially in the form set forth in Schedule 2.3 b) ;

c)

one or more patent assignment agreement(s) between Seller in its own name, the Asset Seller Companies and Purchaser or its designee regarding the transfer of the Patents as set forth in Schedule 2.1.1(b)(A) to be signed and executed at Closing substantially in the form set forth in Schedule 2.3 c) ;

2.4

Excluded Liabilities

Except for Liabilities related to the Assets, but only to the extent such Liabilities arise from any event, circumstance or condition occurring after the Closing Date (the Assumed Liabilities ), Purchaser shall not assume by virtue of this Agreement or the transactions contemplated hereby, and shall have no Liability for, any Liabilities of Seller or any of Seller’s Affiliates (including, without limitation, those related to the Product Lines) of any kind, character or description whatsoever (the Excluded Liabilities ). Seller shall, and shall cause its Affiliates to, discharge in a timely manner or shall make adequate provision for all of the Excluded Liabilities that affect the Product Lines, Assets or Assumed Liabilities, provided that Seller have the ability to contest, in good faith, any such claim of Liability asserted in respect thereof by any Person. Excluded Liabilities shall include, without limitation: (a) Taxes of any nature whatsoever of the Asset Seller Companies arising from the operation of the Product Lines or the ownership of the Assets for any period (or portion of any period) ending on or prior to the Closing and any Taxes that will arise as a result of the purchase,

sale or transfer of the Assets pursuant to this Agreement other than as described in Section 13.2; and (b) all Accounts Payable arising on or prior to the Closing Date.

to ensure that all Transferred Employees and Additional Transferred Employees do not object to the transfer of employment to Purchaser or its designee. The collective bargaining agreements applicable to the Transferred Employees as set out in Schedule 2.7.1 are acknowledged by Purchaser.

2.7.3

Purchaser will be responsible for compliance after the Closing Date with the requirements of all applicable statutes, laws, ordinances, rules or regulations of any governmental authority pertaining to employment termination or any applicable plant closing notification or similar law of any governmental authority related to the Transferred Employees and Additional Transferred Employees, and agrees to indemnify and defend Seller and its Affiliates from and against any and all Liability incurred by or assessed against Seller or its Affiliates arising out of, or due to, claims, suits, penalties and other forms of Liability filed administratively, judicially, or otherwise relating to a violation committed by Purchaser of any such statue, law, ordinance, rule or regulation and occurred after the Closing Date. The same shall apply mutatis mutandis to Seller for the time prior to the Closing Date, provided that such obligations shall cover any and all employees of any Transferred Company or Asset Seller Company or other Affiliate of Seller, even if such claims, etc. are brought after the

Closing. For the avoidance of doubt, but except as otherwise provided for in this Agreement, including as provided in Section 2.7.4 and Section 2.7.5, should any employee other than a Transferred Employee or an Additional Transferred Employee pass to Purchaser or Purchaser’s Affiliates, as the case may be, or should any other individual assert claims against Purchaser or Purchaser’s Affiliates based upon the allegation that his/her employment relationship has passed to Purchaser or Purchaser’s Affiliates, such claims shall be handled by, and at costs of, Purchaser or Purchaser’s Affiliates, as the case may be.

2.7.5

(i)

to accept such offer, in which case they will not be entitled to severance under the IA/SP from Micronas GmbH and they will receive a

commitment from Purchaser to be protected under equivalent terms as the IA/SP for the first year of employment with German NewCo and on a pro rata basis for the succeeding consecutive three years; or

c)

In the event that as of April 22, 2009, less than (85)% of each of the Product Line personnel comprising Group One and/or less than (70)% of each of the Product Line personnel comprising Group Two of the Transferred Employees as listed in Schedule E have accepted the offer of employment by German NewCo, Purchaser shall have the right to terminate this Agreement, and the provisions of Section 4.4 shall apply. Seller agrees that in the event this Agreement is terminated in accordance with this Section 2.7.5, it will transfer to TC each of those Transferred Employees who had previously accepted the offer to join German NewCo and grant them severance pursuant to the IA/SP. This obligation will explicitly survive termination of this Agreement.

d)

In the event that employees listed on Schedule E who are offered employment with German NewCo do not accept such offer on or before April 22, 2009 ( Non-Accepting Employees ), Purchaser or Purchaser’s Affiliates (including German NewCo ) agree that for a grace period of six (6) months commencing as of May 1, 2009, if German NewCo hires any Non-Accepting Employees, Purchaser will reimburse Seller an amount equal to the severance payment paid by Micronas GmbH to such Non-Accepting Employee pursuant to the terms of the IA/SP.

e)

Seller agrees that, with respect to up to ten (10) Micronas GmbH employees who have been transferred into the TC or terminated by Micronas GmbH (such employees hereinafter referred to as Claiming Employees ) and who file claims against Purchaser or Purchaser’s Affiliates (including German NewCo) for employment during the first three (3) months following the date on which such employees were either transferred into the TC or terminated by Micronas GmbH ( Labor Claim ), Seller will indemnify and hold harmless Purchaser and its Affiliates (including German NewCo), and any of their respective directors, officers, employees, controlling persons, agents and representatives from and against any and all Liabilities associated with or related to (i) each such Labor Claim and (ii) each such Claiming Employee (such Liabilities hereinafter referred to as Claiming Employee Liabilities ). Claiming Employee Liabilities shall include, without limitation, (A) any severance pay, salary, employee benefits, bonuses, and any other employment related expense associated with such Claiming Employee, and (B) any Liabilities related to Labor Claims by such Claiming Employee based upon the allegation that his/her employment relationship

has or should have transferred to Purchaser or Purchaser’s Affiliates. In the event a Claiming Employee becomes an employee of Purchaser or an Affiliate of Purchaser as a result of the settlement or resolution of such Claiming Employee’s Labor Claim (or as a result of a decree, order or holding of a court, administrative proceeding, arbitrator or other governmental entity relating to such Claiming Employee’s Labor Claim), Purchaser and its Affiliates shall use commercially reasonable efforts to mitigate the Claiming Employee Liabilities associated with or related to such Claiming Employee. For the avoidance of doubt, Seller’s indemnification obligations under this Section 2.7.5 shall not be subject to the limitation on Seller’s Liability under Section 7.2.1 of this Agreement and all such obligations shall constitute “Excluded Liabilities” hereunder.

Assignable Assets and appoints Purchaser its attorney-in-fact to act in its name on its behalf with respect thereto, and Purchaser agrees to indemnify and hold Seller and its Affiliates, agents, successors and assigns harmless from and against any and all Liabilities and losses based upon, arising out of or relating to Purchaser’s performance of, or failure to perform, such obligations under the Non-Assignable Assets.

Purchaser agrees to reimburse Seller for the foregoing. In addition, nothing in this Section 2.9.3 shall obligate Seller to renew any Licensed IP Rights. If Seller obtains any such consent to assignment after the Closing Date, Seller shall promptly thereafter assign to Purchaser or its designee such Licensed IP Rights (with respect to the Product Lines).

a)

7,000,000 shares of TMI’s Common Stock ( Consideration Shares );

b)

Warrants to acquire up to 3,000,000 shares of TMI’s Common Stock ( Warrants ), with such Warrants to be in substantially the form set forth in Schedule 3.1 , which Warrants provide that Seller shall have the right to purchase up to 1,000,000 warrant shares on and after the second anniversary of the Closing at an exercise price of US$4.00 per share, an additional 1,000,000 warrant shares on and after the third anniversary of the Closing at an exercise price of US$4.25 per share and the remaining warrant shares on and after the fourth anniversary of the Closing at an exercise price of US$4.50 per share, with an expiration date of 5 (five) years after the Closing; and

c)

An amount of cash equal to one percent (1%) of the aggregate value allocated under Schedule 3.5 to the purchase of 100% of the issued shares of all of the Transferred Companies.

a)

Transfer Agreements . The Transfer Agreements shall have been duly executed and delivered by and to the Parties;

b)

Compliance with Nasdaq Requirements; Approval for Listing . TMI shall have complied with all Nasdaq requirements, if any, required in connection with the issuance of the Consideration Shares, the Warrants, and Common Stock issuable upon exercise of the Warrants, and the Consideration Shares and Common Stock issuable upon exercise of the Warrants shall have been approved for listing on Nasdaq.

c)

Merger Control Laws . All approvals under applicable merger control laws as set out in Schedule 4.2 c) shall have been obtained and any waiting period relating thereto shall have expired or been terminated by the competent authority;

d)

Governmental Permits, Authorization and Notices . Any and all governmental, regulatory or similar licenses, permits, concessions and authorizations or notices necessary to the consummation or the transactions contemplated by this Agreement and to the conduct of the Product Lines, as listed in Schedule 4.2 d) shall have been obtained or given, in particular all notices to employee representatives, unions, governmental agencies and corporate bodies shall have been made;

e)

No Governmental or Other Proceeding . No action, order, injunction or decree of any court, administrative body or arbitration tribunal shall be in effect on the Closing Date, which seeks to enjoin, restrain, prohibit or make illegal the consummation of any of the transactions contemplated under this Agreement or which could reasonably be expected to otherwise result in a Material Adverse Effect, and there shall not be pending or threatened on the Closing Date, any action or proceeding in, before or by any court, administrative body or arbitration tribunal which could reasonably be expected to result in the issuance of any such action, order, injunction or decree which could enjoin, restrain, prohibit or make illegal the consummation of any of the transactions contemplated under this Agreement or which could reasonably be expected to otherwise result in a Material Adverse Effect.

f)

Representations and Warranties . Each of the representations and warranties of Seller, TMI and Purchaser set forth in this Agreement shall be true and correct in all material respects, in each case, as of the Closing Date as though made on and as of the Closing Date or, in the case of representations and warranties made as of a specified date earlier than the Closing Date, on and as of such earlier date.

g)

No Material Adverse Changes . There shall have been no Material Adverse Effect and no TMI/Purchaser MAC.

h)

Amendment to Rights Agreement . The Company shall have amended the Rights Agreement in substantially the form of Exhibit 3 to the Stockholders Agreement.

4.4.3

If this Agreement is terminated, all provisions of this Agreement shall cease to be effective except for Section 2.7.5 c), Section 4.4.2, Section 11 (Confidentiality and Publicity), Section 13.1 (Expenses and Transfer Taxes), Section 14 (Notices), Section 18 (Governing Law) and Section 19 (Jurisdiction).

Except as stated in this Section 4.4, or as provided in Section 2.7.5, no Party has the right to terminate this Agreement.

4.5

Reserved

4.6

Closing Actions

At the Closing the following actions shall occur, which actions shall be deemed to occur simultaneously:

4.6.1

Closing Actions by Seller. At the Closing, Seller shall deliver or cause to be delivered to Purchaser, as a condition to Purchaser’s obligations to effect the transactions contemplated under this Agreement, each of the following:

Micronas Holland Holding B.V., Nijmegen, the Netherlands, or the equivalent under the local jurisdiction;

f)

resignation letters of each of the board members representing Seller as set forth in Schedule 4.6.1 on the board of directors of the Transferred Companies, each such resignation to be effective as of the Closing Date and to include a statement of the resigning board members that he has no claims against the respective Transferred Company;

g)

a certificate executed by the Chief Executive Officer and/or Chief Financial Officer of Seller stating that the conditions specified in Section 4.2 (other than those in Section 4.2 b) or 4.2 h)) have been satisfied;

h)

confirmation of receipt of the Consideration;

i)

updated Schedule 4.8 (guarantees and similar undertakings);

j)

physical handover of all Equipment, Assets and Files; and

k)

further activities as determined by the Parties.

a)

execution copy of the Transfer Agreements and the Stockholders Agreement;

b)

the Consideration;

c)

a certificate executed by the Chief Executive Officer and/or Chief Financial Officer of TMI stating that the conditions specified in Section 4.2 (other than those in Section 4.2 d) or 4.2 e)) have been satisfied;

d)

a certificate executed by the President and/or a Director of Purchaser stating that the conditions specified in Section 4.2 (other than those in Section 4.2 d) or 4.2 e)) have been satisfied;

e)

an opinion from DLA Piper, counsel to Purchaser and TMI, dated as of the Closing, in the form attached hereto in Schedule 4.6.2 ;

f)

copies of resolutions of the Board of Directors of TMI approving the issuance of the Consideration Shares, the Warrants and the Common Stock issuable upon exercise of the Warrants;

g)

a copy of the notice filed by TMI to list on Nasdaq the Consideration Shares and the Common Stock issuable upon exercise of the Warrants; and

h)

further activities as determined by the Parties.