IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE : :

Transcription

1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x In re Trident Microsystems, Inc., et al., 1 Debtors x Chapter 11 Case No (CSS) (Jointly Administered) MOTION OF DEBTORS AND DEBTORS IN POSSESSION TO SHORTEN NOTICE AND OBJECTION PERIODS AND SET EXPEDITED HEARING FOR THE DEBTORS MOTION FOR ENTRY OF AN ORDER PURSUANT TO 11 U.S.C. 105(a) APPROVING CROSS-BORDER COURT-TO-COURT PROTOCOL The above-captioned debtors and debtors in possession (collectively, the Debtors ) hereby submit this motion for entry of an order pursuant to Rule 9006 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ) and Rules (c) and (e) of the Local Rules of Bankruptcy Practice and Procedure for the United States Bankruptcy Court for the District of Delaware (the Local Rules ), shortening the applicable notice periods for hearing and response and setting an expedited hearing (the Motion to Shorten ) on the Debtors Motion for Entry of an Order Pursuant to 11 U.S.C. 105(a) Approving Cross-Border Court-to-Court Protocol (the Motion ), 2 filed on January 17, A copy of the Motion is attached hereto as Exhibit A. In support of the Motion to Shorten, the Debtors respectfully state as follows 1 2 The Debtors are the following two entities (the last four digits of their respective taxpayer identification numbers, if any, follow in parentheses) Trident Microsystems, Inc. (6584) and Trident Microsystems (Far East) Ltd. The mailing address of each of the Debtors, solely for purposes of notices and communications, is 1170 Kifer Road, Sunnyvale, California Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Motion. EAST\

2 Jurisdiction and Venue 1. The Court has jurisdiction over this matter under 28 U.S.C. 157 and This is a core proceeding under 28 U.S.C. 157(b). Venue is proper in this district under 28 U.S.C and Background 2. On January 4, 2012 (the Petition Date ), each of the Debtors filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the Bankruptcy Code ). The Debtors are in possession of their properties and continue to operate their business as debtors and debtors in possession under sections 1107 and 1108 of the Bankruptcy Code. 3. On January 5, 2012, the Court entered an order directing joint administration of these cases pursuant to Rule 1015(b) of the Bankruptcy Code. An official committee of unsecured creditors has not yet been appointed in these cases. Relief Requested 4. The Debtors hereby request that the Court enter an order (i) shortening the notice period for the Motion pursuant to Bankruptcy Rule 9006 and Local Rule (e), (ii) scheduling an expedited hearing (the Hearing ) on the relief requested in the Motion for January 25, 2012 at 1100 a.m., (iii) allowing any objections to the relief requested in the Motion to be raised at the Hearing, and (iv) granting such other and further relief to the Debtors as the Court deems proper. Basis for Relief 5. Generally, Local Rule governs time for service and filing of motions to be heard by the Court. Local Rule (c) requires that motions be filed and served at least 14 days prior to the hearing date scheduled for such motion (or 17 days if notice is given by regular mail) unless the Bankruptcy Rules or Local Rules state otherwise. Further, Local Rule (e) EAST\

3 provides that, [N]o motion will be scheduled on less notice than required by these Local Rules or the [Bankruptcy Rules] except by order of the Court, on written motion (served on all interested parties) specifying the exigencies justifying shortened notice. 6. As more fully set forth in the Motion, the Debtors, seek, among other things, entry of an order approving the Cross-Border Insolvency Protocol Stipulation Regarding Trident Microsystems, Inc. and Trident Microsystems (Far East) Ltd. (the Protocol ). 7. The relief requested in the Motion is necessary for the efficient administration of these Bankruptcy Cases and the Cayman Proceedings with the objectives of (i) reducing the total costs incurred by the Cayman Liquidators in protecting the interests of creditors by avoiding duplication of efforts; (ii) avoiding any potential conflict between the Cayman Proceedings and the Chapter 11 Cases; (iii) ensuring transparency and accountability in the conduct of the proceedings in the United States and the Cayman Islands; and (iv) providing a framework for protecting the interests of, and maximizing returns to, all creditors including by way of exploring a plan of compromise or arrangement with the creditors of TMFE. 8. On January 11, 2012, the Cayman Court appointed the Cayman Liquidators. The Debtors have been working with the Cayman Liquidators to develop a protocol to accomplish the above-mentioned objectives. 9. On January 13, 2012 at the request of Debtors counsel, the Bankruptcy Court s chambers informed the Debtors that it would be available for a joint hearing with the Cayman Court to consider the Protocol on January 25, 2012 at 1100 a.m. On, January 16, 2012, the Debtors were informed that Cayman Court would also be available on at that date and time. As such, the Debtors submit that the exigencies justify the granting of the Motion to Shorten to have the Hearing go forward as planned. EAST\

4 10. Local Rule (c) requires that the objection deadline with respect to motions be scheduled to permit all objections to be filed and served at least (7) days before the hearing date. Due to the nature of the Motion and the compressed timeframe in which the Debtors would like the relief requested therein to be considered by this Court, the Debtors believe that shortening the seven day period is appropriate under the circumstances, and hereby request that all parties-in-interest be allowed to raise any objections to the relief requested in the Motion at the Hearing. Notice 11. Notice of this Motion to Shorten has been provided to (a) the Office of the United States Trustee, (b) the Debtors twenty largest unsecured creditors, as identified in their respective chapter 11 petitions, (c) counsel to the Stalking Horse Purchaser, (d) the United States Attorney s Office for the District of Delaware, (e) the Securities and Exchange Commission and (f) any parties requesting notice in these cases pursuant to Bankruptcy Rule In light of the nature of the relief requested, the Debtors respectfully submit that no further notice of this Motion to Shorten is required. EAST\

5 WHEREFORE, the Debtors respectfully request that the Court enter an order, substantially in the form attached hereto as Exhibit B (i) granting the relief requested herein and (ii) granting such other and further relief as the Court may deem proper. Dated January 17, 2012 Wilmington, Delaware Respectfully submitted, /e/ Stuart M. Brown Stuart M. Brown (DE 4050) Cynthia Moh (DE 5041) DLA PIPER LLP (US) 919 North Market Street, Suite 1500 Wilmington, Delaware Telephone (302) Facsimile (302) stuart.brown@dlapiper.com cynthia.moh@dlapiper.com -and- Richard A. Chesley (IL ) Kimberly D. Newmarch (DE 4340) Chun I. Jang (DE 4790) DLA PIPER LLP (US) 203 N. LaSalle Street, Suite 1900 Chicago, Illinois Telephone (312) Facsimile (312) richard.chesley@dlapiper.com kim.newmarch@dlapiper.com chun.jang@dlapiper.com PROPOSED ATTORNEYS FOR DEBTORS AND DEBTORS IN POSSESSION EAST\

6 EXHIBIT A (Motion) EAST\

7 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x In re Trident Microsystems, Inc., et al., 1 Debtors x Chapter 11 Case No (CSS) (Jointly Administered) Proposed Hearing Date 1/25/12 at 1100 a.m. (EST) Proposed Obj. Deadline At the Hearing DEBTORS MOTION FOR ENTRY OF AN ORDER PURSUANT TO 11 U.S.C. 105(a) APPROVING CROSS-BORDER COURT-TO-COURT PROTOCOL The above-captioned debtors and debtors in possession (collectively, the Debtors ) submit this motion (the Motion ) for the entry of an order, pursuant to section 105(a) of title 11 of the United States Code (the Bankruptcy Code ) and Rules 1015(b) of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), approving the Cross-Border Insolvency Protocol Stipulation Regarding Trident Microsystems, Inc. and Trident Microsystems (Far East) Ltd. (the Protocol ); 2 and granting them such other and further relief as the Court deems just and proper. In further support of this Motion, the Debtors respectfully represent as follows Jurisdiction and Venue 1. The Court has jurisdiction over this matter under 28 U.S.C. 157 and This is a core proceeding under 28 U.S.C. 157(b). Venue is proper in this district under 28 U.S.C and The Debtors are the following two entities (the last four digits of their respective taxpayer identification numbers, if any, follow in parentheses) Trident Microsystems, Inc. (6584) and Trident Microsystems (Far East) Ltd. The mailing address of each of the Debtors, solely for purposes of notices and communications, is 1170 Kifer Road, Sunnyvale, California A copy of the Protocol is attached as Exhibit 1 to the proposed form of order. EAST\

8 Background General Background 2. On January 4, 2012 (the Petition Date ), each of the Debtors filed with this Court a voluntary petition for relief under chapter 11 of the Bankruptcy Code. 3. On January 5, 2012, Trident Microsystems (Far East) Ltd. ( TMFE ), an exempted company incorporated in the Cayman Islands with limited liability filed a winding up petition with the Grand Court of the Cayman Islands ( Cayman Court ), pursuant to section 94 of the Cayman Islands Companies Law (2011 Revision). On January 11, 2012, the Cayman Court appointed joint provisional liquidators to TMFE ( Cayman Liquidators ) pending the hearing of the winding up petition which is listed to be heard on February 16, TMI was incorporated in California in 1987 and reincorporated in Delaware in TMI is the direct parent company of TMFE. TMFE is the direct or indirect parent of subsidiary entities organized under the laws of various foreign countries (the Foreign Subsidiaries and together with TMI and TMFE, Trident ). 5. Trident currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and settop boxes. Trident s product line includes system-on-a-chip ( SoC ) semiconductors that provide completely integrated solutions for processing and optimizing video, audio, and broadcast and satellite signals to produce high-quality and realistic images and sound. Trident s products also include frame rate converter, demodulator, audio decoder products, interface devices, and media processors. Trident s customers have included many of the world s leading manufacturers of EAST\

9 consumer electronics, computer display, and set-top box products, including Samsung, LG, Sony, Sharp, Philips, Comcast, and DirecTV. 6. TMI serves as the corporate head of Trident and provides the corporate oversight and administrative services necessary for Trident s operations. TMFE serves as the manufacturing procurement hub and primary accounts payable center for Trident. TMFE holds most of Trident s intellectual property assets and contracts with all suppliers for use of the intellectual property and the production of finished goods. Pursuant to a distribution and supply agreement between TMFE and non-debtor Trident Microsystems (Hong Kong) Limited ( TMHK ), TMFE sells finished goods to TMHK for re-sale to Trident s customers. TMFE also serves as Trident s primary accounts payable processor and processes payments due to suppliers as well as payments to the non-revenue generating Foreign Subsidiaries that provide research and development, sales and marketing services for Trident. 7. Like many technology based industries, the set-top box and television industries in which Trident focuses its operations have been undergoing rapid changes which have made it difficult for Trident to operate profitably. Trident has faced increased pricing pressure from Taiwanese SoC suppliers who have recently made great inroads in penetrating the market. Additionally, industry semiconductor inventory levels are currently elevated due to a slowdown in consumer electronics markets primarily driven by a slowdown in the Western economies, which has forced all market participants, including Trident, to further adjust pricing to manage inventory levels. These pricing pressures have been compounded by set-top box manufacturers who have been slower than anticipated in launching new products. As a result, suppliers have been straddled with higher than anticipated inventory levels and high development costs that cannot be offset by next generation product sales. In addition to these pricing and inventory EAST\

10 pressures, there has also been a shift in the industry s supply chain dominated by Asian OEMs (original equipment manufacturers) and TV manufacturers are increasingly depending on manufacturing SoC and FRC (frame rate converter) components for high-end TVs in-house, reducing the need to look to outside suppliers for products. 8. As a result of these developments, Trident has experienced continued operating losses which have resulted in declining cash over the past year. The deteriorated value of the outstanding common stock and the termination of the Bank of America line of credit have restricted Trident s ability raise money through traditional means. The combination of lower margins and sale volumes, high employee costs and limited access to new capital has significantly affected Trident s liquidity and ability to pay its debts as they become due. 9. Prior to filing these chapter 11 cases (the Chapter 11 Cases ), the Debtors undertook a marketing effort to identify a potential purchaser of their set-top box business line. As discussed in various motions filed on the Petition Date, the Debtors have identified a stalking horse bidder for their set-top box business. The Debtors believe that a rapid sale of the set-top box business will allow them to immediately stop the drain on cash balances and afford them an opportunity to determine which, if any, of the Debtors other business lines should be marketed for sale and take such other steps necessary to reorganize their remaining operations into a profitable and sustainable business. Relief Requested 10. To facilitate the Debtors efforts towards maximizing value of their estates in light of the international nature of Trident s businesses and given the ancillary insolvency proceedings of TMFE in the Cayman Islands (the Cayman Proceedings ) before the Cayman Court, the Debtors respectfully submit that a framework of general principles is appropriate to address EAST\

11 certain issues that are likely to arise in connection with the cross-border insolvency. Specifically, it is in the interest of all parties, including the Cayman Liquidators, TMFE, TMI and their respective creditors, and the respective courts, to seek to cooperate in the conduct of the Cayman Proceedings and the Chapter 11 Cases with the following objectives (i) reducing the total costs incurred by the Cayman Liquidators in protecting the interests of creditors by avoiding duplication of efforts; (ii) avoiding any potential conflict between the Cayman Proceedings and the Chapter 11 Cases; (iii) ensuring transparency and accountability in the conduct of the proceedings in the United States and the Cayman Islands; and (iv) providing a framework for protecting the interests of, and maximizing returns to, all creditors including by way of exploring a plan of compromise or arrangement with the creditors of TMFE. Basis for Relief 11. The Protocol is designed to achieve these various objectives by implementing a framework of general principles to address the basic administrative and procedural issues arising out of the simultaneous administration of the Cayman Proceedings and the Chapter 11 Cases. In particular, the Protocol includes provisions relating to 3 Conducting Joint Hearings before Both the Bankruptcy Court and the Cayman Court. Should the Bankruptcy. Court and the Cayman Court decide that it would be advisable to conduct a joint hearing on a particular matter, the Protocol sets forth administrative procedures, including procedures governing the submission of pleadings and evidentiary materials in both the Bankruptcy. Court and the Cayman Court, and procedures for communications between the Bankruptcy. Court and the Cayman Court before and after any joint hearing. Appointment and Compensation of Representatives. Except as specifically provided in the Protocol, the Cayman Court shall have sole jurisdiction and power over the Cayman Liquidators, as to their tenure in office, the conduct of the Cayman Proceedings under Cayman Islands Law, the appointment, role and powers of the Cayman Liquidators and the hearing and determination of matters 3 The following is intended as a summary and is subject in all respects to the form of Protocol approved by this Court. EAST\

12 arising in the Cayman Proceedings under Cayman Islands Law. The Cayman Liquidators shall be compensated for their services in accordance with Cayman principles under Cayman Islands Law. The Bankruptcy Court shall have sole jurisdiction and power over the conduct of the Chapter 11 Cases, the compensation of the professionals rendering services in the Bankruptcy Chapter 11 Cases, and the hearing and determination of matters arising in the Chapter 11 Cases. Notice. The Protocol provides for notice to interested parties in both the Chapter 11 Cases and the Cayman Proceedings upon the filing of any motion, application or other pleading or paper that relates to matters addressed by the Protocol or having cross-border effect. Administrative Efficiency. Given that TMFE is also the subject of and participating in the Cayman Proceedings, in an effort to promote the orderly and efficient administration of the Cayman Proceedings, TMFE is expressly authorized to conduct business during the Cayman Proceedings in accordance with the powers and authority granted to them by the Cayman Court and applicable Cayman insolvency law; provided, however, that to the extent actions contemplated by TMFE authorized by the Cayman Court or Cayman insolvency law may not be permitted in the Chapter 11 Cases without further order of the Bankruptcy Court, the Debtors shall be required to seek approval of such action. 12. The Protocol is not intended to divest or diminish the independent jurisdiction of the Bankruptcy Court over the Chapter 11 Cases or of the Cayman Court over the Cayman Proceedings. In particular, the Protocol provides that it is not intended to circumvent, alter, or otherwise affect the rights, obligations, or laws of any jurisdiction and accordingly, if a party to the Protocol is directed by its court to act (or not to act) with respect to a particular issue whether on its own application or otherwise, that party s obligation to follow its court s direction should not be impaired or abridged by the Protocol. 13. The relief requested herein is authorized under the Bankruptcy Court s general equitable powers, which are codified in section 105(a) of the Bankruptcy Code. Under section 105(a), the court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of [the Bankruptcy Code]. The Protocol provides a necessary and appropriate means for communication between the courts. That communication EAST\

13 will allow for coordination of the Cayman Proceedings with these Chapter 11 Cases, and will prove beneficial to the administration of both the Chapter 11 Cases and the Cayman Proceedings and to the promotion of judicial economy. 14. A number of courts in this district and in other districts have authorized similar protocols for managing cross-border insolvency proceedings. See, e.g., In re Nortel Networks Inc. Case No (KG) (Bankr. D. Del. Jan. 15, 2009); In re Progressive Molded Prods., Case No (KJC) (Bankr. D. Del. July 14, 2008); In re Quebecor World (USA) Inc., Case No (Bankr. S.D.N.Y. Jan. 21, 2008); In re Calpine Corp., Case No (Bankr. S.D.N.Y. Apr. 12, 2007); In re Pope & Talbot, Inc., Case No (CSS) (Bankr. D. Del. Dec. 14, 2007); In re Systech Retail Svs. ( U.S.A.) Inc., Case No ATS (Bankr. E.D.N.C. 2003); In re Fed. Mogul Global Inc., Case No (Bankr. D. Del. Feb. 7, 2002); In re Fin. Asset Mgmt. Found., Case No (Bankr. S.D. Cal. July 25, 2001); In re PSINet Inc., Case No (Bankr. S.D.N.Y. July 10, 2001); In re Laidlaw USA, Inc., Case No (Bankr. W.D.N.Y. Aug. 20, 2001); In re Livent (U.S.) Inc., Case No (Bankr. S.D.N.Y. 1998). 15. For the foregoing reasons, the Debtors assert that the Protocol is necessary to promote the efficient and effective administration and coordination of the Chapter 11 Cases with the Cayman Proceedings and is in the best interests of the Debtors estates, their creditors, and all parties in interest. Notice 16. Notice of this Motion shall be provided to (a) the Office of the United States Trustee for the District of Delaware, (b) the Debtors twenty largest unsecured creditors, as identified in their respective chapter 11 petitions, (c) counsel to the Stalking Horse Purchaser, (d) EAST\

14 the United States Attorney s Office for the District of Delaware, (e) the Securities and Exchange Commission, and (f) those parties requesting notice pursuant to Bankruptcy Rule WHEREFORE, the Debtors respectfully request that this Court authorize and approve the Protocol, substantially in the form attached hereto as Exhibit A, and grant such other and further relief as is just and proper. Dated January 17, 2012 Wilmington, Delaware Respectfully submitted, /s/ Stuart M. Brown Stuart M. Brown (DE 4050) Cynthia Moh (DE 5041) DLA PIPER LLP (US) 919 North Market Street, Suite 1500 Wilmington, Delaware Telephone (302) Facsimile (302) stuart.brown@dlapiper.com cynthia.moh@dlapiper.com -and- Richard A. Chesley (IL ) Kimberly D. Newmarch (DE 4340) Chun I. Jang (DE 4790) DLA PIPER LLP (US) 203 N. LaSalle Street, Suite 1900 Chicago, Illinois Telephone (312) Facsimile (312) richard.chesley@dlapiper.com kim.newmarch@dlapiper.com chun.jang@dlapiper.com PROPOSED ATTORNEYS FOR DEBTORS AND DEBTORS IN POSSESSION EAST\

15 EXHIBIT A Proposed Order EAST\

16 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x In re Trident Microsystems, Inc., et al., 1 Debtors x Chapter 11 Case No (CSS) (Jointly Administered) Re Docket No. ORDER PURSUANT TO 11 U.S.C. 105(a) APPROVING CROSS-BORDER COURT-TO-COURT PROTOCOL Upon the Debtors Motion for Entry of an Order Pursuant to 11 U.S.C. 105(a) Approving Cross-Border Court-to-Court Protocol (the Motion ); 2 and it appearing that this Court has jurisdiction to consider the Motion pursuant to 28 U.S.C. 157 and 1334; and it appearing that venue of these Chapter 11 Cases and the Motion in this district is proper pursuant to 28 U.S.C and 1409; and it appearing that this matter is a core proceeding pursuant to 28 U.S.C. 157(b); and this Court having determined that the relief requested in the Motion is in the best interests of the Debtors, their estates, their creditors and other parties in interest; and it appearing that proper and adequate notice of the Motion has been given and that no other or further notice is necessary; and after due deliberation thereon; and good and sufficient cause having been shown; IT IS HEREBY ORDERED THAT 1. The Motion is GRANTED 1 2 The Debtors are the following two entities (the last four digits of their respective taxpayer identification numbers, if any, follow in parentheses) Trident Microsystems, Inc. (6584) and Trident Microsystems (Far East) Ltd. The mailing address of each of the Debtors, solely for purposes of notices and communications, is 1170 Kifer Road, Sunnyvale, California Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Motion. EAST\

17 2. The Protocol, attached hereto as Exhibit 1, is approved in all respects, subject to approval of the Protocol by the Cayman Court, as it may be amended or supplemented by further order of this Court. 3. Notwithstanding any provision in the Bankruptcy Rules to the contrary, (i) the terms of this Order shall be immediately effective and enforceable upon its entry, (ii) the Debtors are not subject to any stay in the implementation, enforcement or realization of the relief granted in this Order, and (iii) the Debtors may, in their discretion and without further delay, take any action and perform any act authorized under this Order. 4. This Court shall retain jurisdiction over any and all matters arising from the interpretation or implementation of this Order. Dated, 2012 Wilmington, Delaware The Honorable Christopher S. Sontchi United States Bankruptcy Judge EAST\

18 EXHIBIT 1 The Protocol EAST\

19 CROSS-BORDER INSOLVENCY PROTOCOL STIPULATION REGARDING TRIDENT MICROSYSTEMS, INC. AND TRIDENT MICROSYSTEMS (FAR EAST), LTD. Subject to the authorization from the Grand Court of the Cayman Islands (the Cayman Court ) and the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court ), Gordon MacRae and Eleanor Fisher of Zolfo Cooper ( ZC ), as joint provisional liquidators of Trident Microsystems (Far East), Ltd. ( TMFE ) enter into this Stipulation Regarding Cross-Border Insolvency Protocol along with Trident Microsystems, Inc. ( TMI ) and TMFE, as follows Preliminary Statement The purpose of the Stipulation is to ensure the just, efficient and expeditious administration of the pending insolvency proceedings of TMFE in the Cayman Islands (the Cayman Proceedings ) and the chapter 11 proceedings of TMI and TMFE (the Bankruptcy Proceedings ) before the Bankruptcy Court. It is in the interest of all parties, including the joint provisional liquidators of TMFE (the Cayman Liquidators ), TMI and their respective creditors, and the respective courts, to seek to cooperate in the conduct of the insolvency proceedings and TMFE and TMI s chapter 11 proceedings, with the following objectives Reducing the total costs incurred by the Cayman Liquidators in protecting the interests of creditors by avoiding duplication of efforts; Avoiding any potential conflict between the Cayman Proceedings and the Bankruptcy Proceedings; Ensuring transparency and accountability in the conduct of the proceedings in the United States and the Cayman Islands; and EAST\

20 Providing a framework for protecting the interests of, and maximizing returns to, all creditors including by way of exploring a plan of compromise or arrangement with the creditors of TMFE. Mindful of these goals, the parties enter into this Stipulation. Background The Parties TMI was incorporated in California in 1987 and reincorporated in Delaware in TMI is the direct parent company of TMFE, which, is the direct or indirect parent of subsidiary entities organized under the laws of various foreign countries (the Foreign Subsidiaries, collectively with TMI and TMFE, the Group ). TMI s principal executive offices are located in Sunnyvale, California. TMI serves as the corporate head of the Group s entities and provides corporate oversight and administrative services necessary for the operations of the Group. TMFE has no employees and it holds as its principal assets work in progress, receivables and intellectual property in the form of approximately 1,600 patents. In addition, the TMFE is also responsible for the control and administration of accounts payable for the Group. Through administration services performed at TMFE s Hong Kong subsidiary and TMI, the TMFE is responsible for the control and administration of accounts payable on behalf of the entire Group. The Proceedings 1. On January 4, 2012, TMI and TMFE commenced chapter 11 proceedings in the Bankruptcy Court. TMI and TMFE are continuing to serve as a debtors-in-possession pursuant to section 1107 of the United States Bankruptcy Code (the Bankruptcy Code ), and to operate their businesses pursuant to section 1108 of the Bankruptcy Code. EAST\

21 2. On January 4, 2012, TMFE filed a Winding Up Petition, Cause No. FSD 1 of 2012 PCJ, in the Cayman Court. The Stipulation 3. It is agreed among the Cayman Liquidators, TMFE, TMI and Andrew Hinkleman of FTI Consulting, TMI s proposed chief restructuring officer (the CRO ), that a framework of general principles is appropriate to address certain issues that are likely to arise in connection with the cross-border insolvency proceedings of TMI and TMFE including, without limitation, (a) the administration of TMI and TMFE during their respective proceedings, (b) the sale of certain material assets of TMI and TMFE, (c) the payment of certain claims of TMI and TMFE necessary for the continued operation of the Group and (d) the resolution of claims against TMI and TMFE and the payment of creditors. 4. The purpose of the protocol contemplated by this Stipulation is to protect the interests of all creditors of TMI and TMFE and to protect the process by which the Bankruptcy Proceedings and Cayman Proceedings are administered. The protocol will provide a framework for cooperation between multiple jurisdictions and to eliminate wherever possible duplication of effort and promote judicial economy. NOW THEREFORE, the Cayman Liquidators, TMFE and TMI hereby stipulate and agree, subject to the approval by the Bankruptcy Court and the Cayman Court the following 1. Approval shall be sought from the Bankruptcy Court for the joint administration of the bankruptcy cases of TMI and TMFE solely for procedural purposes. EAST\

22 2. An Official Committee of Unsecured Creditors (the Committee ) may be formed in the Bankruptcy Proceedings and it is contemplated that a Cayman liquidation committee will be formed in the Cayman Proceedings (the Cayman Committee, and collectively with the Committee, the Creditors Committees ). While it is understood that the Committee (if it is formed) and the Cayman Committee shall individually have certain statutory obligations, TMI, TMFE, the CRO and the Cayman Liquidators will work with the legal and professional advisors to the Creditors Committees to establish protocols for the efficient administration of the crossborder restructurings. 3. With respect to the sale of material assets of the Group, TMI and the Cayman Liquidators will seek approval of the procedures for such sales (including but not limited to the marketing of such assets and subsequent auction of such assets) and terms of such sales from the Bankruptcy Court and thereafter seek any necessary approvals from the Cayman Court; provided, however, that TMI and TMFE will not consummate the sale of such material assets unless the necessary approvals are received from the Bankruptcy Court and the Cayman Court. 4. With respect to the ordinary course sale of non-material assets that do not require approval of the Bankruptcy Court, the Cayman Liquidators may require that any sale of such non-material assets be subject to the approval of the Cayman Court. For the avoidance of doubt, the sales referenced in this paragraph shall not include ordinary course product sales or licensing transactions by the Company. 5. TMI and the Cayman Liquidators shall use their reasonable best efforts, to file a status report and/or operating report with the Bankruptcy Court and the Cayman Court, within four weeks of the commencement of the Bankruptcy Proceedings and the Cayman Proceedings EAST\

23 setting forth the status of their efforts for the prior month and thereafter file reports at such future intervals as the Bankruptcy Court and the Cayman Court may direct. A copy of such reports shall be served on the members of the Creditors Committees. TMI and the Cayman Liquidators shall use their reasonable best efforts to ensure that a representative (including the CRO) shall also be available for bi-weekly conference calls with the Creditors Committees and their advisors, at which time they or their representatives will apprise and inform the Creditors Committees of the status of their efforts, subject to applicable law. Nothing contained in this paragraph shall alter or modify the obligations of TMI and TMFE to file monthly operating reports as required by the Office of the United States Trustee in the Bankruptcy Proceedings. 6. TMI and TMFE shall be permitted to operate in the ordinary course of their business operations unless otherwise ordered by the Bankruptcy Court or the Cayman Court including in respect of ordinary course product sales between TMFE and TMHK and the licensing of the intellectual property of TMFE to third parties in the ordinary course. To facilitate these operations, the CRO, and/or the officers and directors (or their authorized representatives) of the Company, TMI, TMHK and their subsidiaries, and the Cayman Liquidators shall meet in person or by telephone or videoconference or by whatever means is most appropriate on a weekly basis to address budgeting, cash expenditures, employee matters, ordinary course transactions and all other matters necessary to fully operate the Group s business operations. 7. The Cayman Liquidators shall receive and be given notice of all proceedings in the Bankruptcy Court in accordance with the practices of the Bankruptcy Court and have the right to appear in all proceedings in the Bankruptcy Court. TMFE shall give notice to the CRO and TMI of all proceedings in the Cayman Court and will not object to their attending and EAST\

24 seeking to be heard at any hearings before the Cayman Court. Entropic Communications, Inc. shall receive and be given notice of all proceedings in Cayman Court in accordance with the practices of the Cayman Court and have the right to attend and be heard at all hearings before the Cayman Court. 8. For the avoidance of doubt the Cayman Liquidators shall be permitted to act in a manner consistent with the terms of the Cayman Court orders and shall be permitted to act in a manner consistent with the laws governing the Bankruptcy Proceedings and the Cayman Proceedings. Nothing in this stipulation requires the Cayman Liquidators to take any action that violates any provision of Cayman Islands Law or any order of any Cayman Court or any other applicable law. 9. All creditors of TMFE shall have the opportunity to file a request for service with the Clerk of the Bankruptcy Court, or to participate in the case or proceedings in the Cayman Proceedings. 10. Notice and requirements for approval and authorization of any transactions regarding disposition, liquidation or distribution of assets shall be in accordance with applicable law. 11. TMI and TMFE will seek authority from the Bankruptcy Court and the Cayman Liquidators will seek authority from the Cayman Court authority to maintain the Group s cash management system and bank accounts as described in Exhibit C to the Motion of the Debtors and Debtors in Possession for Entry of Interim and Final Orders (a) Approving the Continued Use of the Debtors Cash Management System, (b) Approving Continued Transfers Between Debtors and Non-Debtor Subsidiaries, (c) Scheduling a Final Hearing on the Motion, and (d) EAST\

25 Granting Related Relief. Thereafter, the TMI and TMFE shall maintain their cash management system and bank accounts in accordance with the Orders of the Bankruptcy Court and the Cayman Court. Any modifications to the cash management system and/or the bank accounts shall be subject to the approval of the Cayman Liquidators and, if required by applicable law, the Bankruptcy Court and the Cayman Court. 12. TMI and TMFE will seek authority from the Bankruptcy Court and the Cayman Liquidators will seek authority from the Cayman Court to pay pre-petition debts of certain critical vendors ( Critical Vendors ) as set out at Exhibit B to the Motion of the Debtors for an Order Authorizing the Payment of Certain Prepetition Claims of Critical subject to an aggregate cap of $2 million (USD), and as further modified by the Bankruptcy Court. Thereafter, TMFE can take steps to pay the Critical Vendors at its discretion in order to minimize any interruption to the day to day operation of the Group, but subject always to the express consent of the JPLs. 13. Except as specifically provided herein, the Cayman Court shall have sole jurisdiction and power over the Cayman Liquidators, as to their tenure in office, the conduct of the Cayman Proceedings under Cayman Islands Law, the appointment, role and powers of the Cayman Liquidators and the hearing and determination of matters arising in the Cayman Proceedings under Cayman Islands Law. The Cayman Liquidators shall be compensated for their services in accordance with Cayman principles under Cayman Islands Law. 14. The Bankruptcy Court shall have sole jurisdiction and power over the conduct of the Bankruptcy Proceedings, the compensation of the professionals rendering services in the Bankruptcy Proceedings, and the hearing and determination of matters arising in the Bankruptcy Proceedings. EAST\

26 15. The Bankruptcy Court will be requested to hold monthly omnibus hearings during which the status of the Bankruptcy Proceedings and the Cayman Proceedings will be discussed. 16. The Bankruptcy Court, and the Cayman Court, may, to the extent permitted by practice and procedure, and with the prior consent (if available) of each court, conduct joint hearings or conferences with respect to any matter related to the conduct, administration, determination or disposition of any aspect of the Cayman Proceedings, or Bankruptcy Proceedings where considered by any two or more Courts to be necessary or advisable and In particular, without limiting the generality of the foregoing, to facilitate or coordinate the proper and efficient conduct of the Bankruptcy Proceedings and Cayman Proceedings. With respect to any such hearings or conferences, unless otherwise ordered, the following may be considered to be appropriate i. A telephone link may be established such that all participating Courts may be able to simultaneously hear the matter in the other Court. ii. Any party intending to rely upon any written evidentiary material in support of a submission shall file identical materials in advance of such hearing or conference with each Court, as reasonably possible and consistent with the procedural and evidentiary rules and requirements of each participating Court. Any party which does not wish to consent to the jurisdiction of a particular Court, shall be entitled to file such materials without, by the sole act of filing anything other than anything other than a proof of claim, being deemed to have consented to the jurisdiction of the Court in which such material is filed. EAST\

27 17. The Cayman Court, and the Bankruptcy Court may, but are not required to, communicate with one another, without advance notice to counsel or counsel being present for any purpose, including, without limitation, to establish guidelines for the orderly making of submissions and rendering of decisions to deal with any other procedural, administrative, or preliminary matters or for the purpose of determining whether consistent rulings can be made by the Cayman Court and/or the Bankruptcy Court and the terms upon which such rulings should be made, and to deal with any other procedural or non-substantive matter in relation to such applications. 18. This Stipulation shall be binding on and inure to the benefit of the parties hereto and their respective successors, assigns, representatives, heirs, executors, administrators, trustees (including any trustees under chapters 7 or 11 of the Bankruptcy Code), and receivers, receiver managers, or custodians appointed under United States law, Cayman Islands Law, as the case may be. 19. This Stipulation may not be waived, amended, or modified orally or in any other way or manner except by a writing signed by the party to be bound, and such approval and authorization of the Bankruptcy Court or Cayman Court as may be necessary and appropriate in the circumstances. Notice of any proposed amendment or modification of the Stipulation shall be provided by the party provided to the Bankruptcy Court, Cayman Court, TMI and TMFE and their counsel of record, the Cayman Liquidators, any representative of the Creditors Committees and the CRO (the Notice Parties ). This Stipulation may be supplemented from time to time by the parties hereto as circumstances require with any supplementing stipulations as approved by the Bankruptcy Court, and Cayman Court. EAST\

28 20. Any request for the entry of an order which is contrary to the provisions of this Stipulation must be made on notice by the proponent of the order to the Notice Parties in accordance with the Notice Procedures. 21. Each party represents and warrants to the other that its execution, delivery, and performance of this Stipulation are within the power and authority of such party and have been duly authorized by such party, except that, with respect to the Cayman Liquidators and TMI, Cayman Court and Bankruptcy Court, respectively, approval is required. 22. This Stipulation may be signed in any number of counterparts, each of which shall be deemed an original and all of which together shall be deemed to be one and the same Instrument, and may be signed by facsimile signature, which shall be deemed to constitute an original signature. 23. The Bankruptcy Court and Cayman Court shall retain jurisdiction over the parties for the purpose of enforcing the terms and provisions of this Stipulation or approving any amendments or modifications thereto. 24. The parties hereto are hereby authorized to take such actions and execute such documents as may be necessary and appropriate to implement and effectuate this Stipulation. 25. The Stipulation is not intended to otherwise circumvent, alter, or otherwise affect the rights, obligations, or laws of any jurisdiction and accordingly, if a party to the Stipulation is directed by its Court to act (or not to act) with respect to a particular issue whether on his own application or otherwise, that party s obligation to follow its Court s direction should not be impaired or abridged by the Stipulation. To the extent any party s obligation to follow its Court s EAST\

29 order conflicts with its obligations under the Stipulation, that party shall be relieved from its obligation under the Stipulation, but such party must notify in writing all other parties of the conflict between its Courts direction or order and the Stipulation, in all other material respects, the affected party will remain bound to the terms of the Stipulation. 26. This Stipulation shall be deemed effective upon its approval of the Bankruptcy Court and the Cayman Court. This Stipulation shall have no binding or enforceable legal effect until approved by the Bankruptcy Court and the Cayman Court. IN WITNESS WHEREOF the parties hereto have caused this stipulation to be executed either individually or by their respective attorneys or representatives hereunto authorized. TRIDENT MICROSYTEMS, INC. By TRIDENT MICROSYTEMS (FAR EAST), LTD. By By By JOINT PROVISIONAL LIQUIDATORS By By EAST\

30 EXHIBIT B (Proposed Order) EAST\

31 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x In re Trident Microsystems, Inc., et al., 1 Debtors x Chapter 11 Case No (CSS) (Jointly Administered) Re Dkt. No. ORDER GRANTING MOTION OF DEBTORS AND DEBTORS IN POSSESSION TO SHORTEN NOTICE AND OBJECTION PERIODS AND SET EXPEDITED HEARING FOR THE DEBTORS MOTION FOR ENTRY OF AN ORDER PURSUANT TO 11 U.S.C. 105(a) APPROVING CROSS-BORDER COURT-TO-COURT PROTOCOL This matter coming before the Court on the Motion of Debtors and Debtors in Possession to Shorten Notice and Objection Periods and Set Expedited Hearing for the Debtors Motion for Entry of an Order Pursuant to 11 U.S.C. 105(a) Approving Cross-Border Court-to-Court Protocol (the Motion to Shorten ), 2 filed by the above-captioned debtors and debtors in possession (collectively, the Debtors ); the Court having reviewed the Motion to Shorten; and the Court having found that (i) the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334, (ii) venue is proper in this district pursuant to 28 U.S.C and 1409, (iii) this is a core proceeding pursuant to 28 U.S.C. 157(b); and the Court having determined that the legal and factual basis set forth in the Motion to Shorten establish just cause for the relief granted herein; and the Court having determined that the relief sought in the Motion to Shorten is 1 2 The Debtors are the following two entities (the last four digits of their respective taxpayer identification numbers, if any, follow in parentheses) Trident Microsystems, Inc. (6584) and Trident Microsystems (Far East) Ltd. The mailing address of each of the Debtors, solely for purposes of notices and communications, is 1170 Kifer Road, Sunnyvale, California Capitalized terms not otherwise defined herein shall have the meanings given to them in the Motion to Shorten. EAST\

32 in the best interests of the Debtors estates, their creditors and other parties in interest; and after due deliberation and sufficient cause appearing therefore; IT IS HEREBY ORDERED THAT 1. The Motion to Shorten is GRANTED as set forth herein. 2. The hearing to consider the Debtors Motion for Entry of an Order Pursuant to 11 U.S.C. 105(a) Approving Cross-Border Court-to-Court Protocol shall be held on January 25, 2012 at 1100 a.m. (Eastern Standard Time) (the Hearing ). 3. The deadline to object to the Motion shall be at the Hearing. 4. This Court shall retain jurisdiction with respect to any matters related to or arising from the implementation of this Order. Dated January, 2012 Wilmington, Delaware The Honorable Christopher S. Sontchi United States Bankruptcy Judge EAST\