Document:

<PAGE>
                                                                    EXHIBIT 10.3

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                              TAX SHARING AGREEMENT

                                 BY AND BETWEEN

                            THREE-FIVE SYSTEMS, INC.

                                       AND

                              BRILLIAN CORPORATION

                                 EFFECTIVE AS OF

                               SEPTEMBER 1, 2003

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<PAGE>

                                TABLE OF CONTENTS
<Table>
<Caption>
                                                                               PAGE
<S>                                                                            <C>
SECTION 1 ADMINISTRATIVE AND COMPLIANCE MATTERS .............................    2

     1.1    Designation of Agent ............................................    2
     1.2    Pre-Distribution Tax Period TFS Consolidated Returns ............    2
     1.3    Allocation ......................................................    2
     1.4    Other Brillian Returns ..........................................    2
     1.5    Post-Distribution Conduct of Brillian ...........................    2
     1.6    Deductions and Certain Taxes Related to Options .................    2

SECTION 2 TAX SHARING .......................................................    3

     2.1    General .........................................................    3
     2.2    Estimated Payments ..............................................    3
     2.3    Payment of Taxes at Year-End ....................................    3
     2.4    Tax Adjustments .................................................    3
     2.5    Allocation of Tax Assets ........................................    4
     2.6    Research Credits ................................................    4
     2.7    Brillian Carrybacks .............................................    4
     2.8    Use of Brillian Tax Assets ......................................    4
     2.9    Separation Taxes ................................................    4

SECTION 3 REPRESENTATIONS AND COVENANTS .....................................    5

     3.1    Representations .................................................    5
     3.2    Brillian Covenants ..............................................    5
     3.3    Exceptions ......................................................    6
     3.4    Supplemental Rulings ............................................    6

SECTION 4 INDEMNITIES .......................................................    7

     4.1    Brillian Indemnity ..............................................    7
     4.2    TFS Indemnity ...................................................    8
     4.3    Discharge of Indemnity ..........................................    8
     4.4    Affiliates ......................................................    8
     4.5    Application to Present and Future Subsidiaries ..................    8
     4.6    Disposition of a TFS Affiliate ..................................    9

SECTION 5 COOPERATION AND TAX PROCEEDINGS ...................................    9

     5.1    Consultation and Cooperation ....................................    9
     5.2    Provision of Tax Return Information .............................    9
     5.3    Failure to Cooperate ............................................   10
     5.4    Provision of Information Relating to Material Developments ......   10
     5.5    Tax Proceedings .................................................   10

SECTION 6 PAYMENTS AND DISPUTE RESOLUTION ...................................   11

     6.1    Payments ........................................................   11
     6.2    Dispute Resolution ..............................................   12

SECTION 7 MISCELLANEOUS .....................................................   14

     7.1    Further Assurances ..............................................   14
</Table>
                                       -i-

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<Table>
<Caption>
                                                                               PAGE
<S>                                                                            <C>
     7.2.   Termination and Survival ........................................   14
     7.3.   Costs and Expenses ..............................................   14
     7.4.   Entire Agreement ................................................   14
     7.5.   Amendment .......................................................   14
     7.6.   No Third Party Beneficiaries ....................................   14
     7.7.   Governing Law ...................................................   14
     7.8.   Notices .........................................................   15
     7.9.   Counterparts ....................................................   15
     7.10.  Binding Effect and Assignment ...................................   15
     7.11.  Severability ....................................................   15
     7.12.  Failure or Indulgence and Remedies ..............................   15
     7.13.  Authority .......................................................   15
     7.14.  Interpretation ..................................................   15
     7.15.  Definitions .....................................................   16
</Table>

                                      -ii-
<PAGE>

                                  EXHIBIT INDEX

<Table>
<S>                                                                            <C>
Exhibit A - TFS Information ................................................   A-1

Exhibit B - Brillian Information ...........................................   B-1
</Table>

                                     -iii-
<PAGE>

                              TAX SHARING AGREEMENT

         This Tax Sharing Agreement (this "Agreement") is entered into as of
September 1, 2003, by and between Three-Five Systems, Inc., a Delaware
corporation ("TFS"), and Brillian Corporation, a Delaware corporation
("Brillian"). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to such terms in Section 7.15 hereof.

                                    RECITALS

         WHEREAS, TFS is the common parent of an affiliated group of
corporations within the meaning of Section 1504(a) of the Code, which currently
files consolidated federal income Tax Returns;

         WHEREAS, Brillian is a first tier subsidiary of TFS;

         WHEREAS, TFS develops, inter alia, liquid crystal on silicon
microdisplay technologies (the "Microdisplay Business");

         WHEREAS, the Board of Directors of TFS has determined that it would be
advisable and in the best interests of TFS and its stockholders for TFS to
transfer to Brillian the business, operations, assets, and liabilities related
to the Microdisplay Business;

         WHEREAS, TFS has agreed to transfer and assign, or cause to be
transferred and assigned, to Brillian substantially all of the assets and
properties of the Microdisplay Business held by TFS and one or more of its
Subsidiaries, and Brillian has agreed to assume certain liabilities and
obligations arising out of or relating to the Microdisplay Business
(collectively, the "Separation");

         WHEREAS, the Board of Directors of TFS has determined that it would be
advisable and in the best interests of TFS and its stockholders for TFS to
distribute on a pro-rata basis to the holders of record of TFS common stock, par
value $.01 per share (the "TFS Common Stock"), without any consideration being
paid by such holders, all of the outstanding shares of Brillian common stock,
par value $.01 per share (the "Brillian Common Stock") owned directly and
indirectly by TFS (the "Distribution");

         WHEREAS, TFS and Brillian intend that the Separation and the
Distribution qualify as free of Federal Tax to TFS and its stockholders under
Sections 355 and 368(a)(1)(D) of the Code; and

         WHEREAS, the parties wish to (i) provide for the payment of tax
liabilities and entitlement to refunds thereof, allocate responsibility for, and
cooperation in, the filing of tax returns, and provide for certain other matters
relating to taxes, and (ii) set forth certain covenants and indemnities relating
to the preservation of the tax-free status of the Separation and the
Distribution.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth below, the parties agree as follows:

<PAGE>

                                   SECTION 1
                      ADMINISTRATIVE AND COMPLIANCE MATTERS

         1.1. DESIGNATION OF AGENT. Each Brillian Affiliate hereby irrevocably
authorizes and designates TFS, as its agent, coordinator, and administrator, for
the purpose of taking any and all actions (including the execution of waivers of
applicable statutes of limitation) necessary or incidental to the filing of any
Return or any other Tax proceedings, and for the purpose of making payments to,
or collecting refunds from, any Tax Authority, in each case relating only to
Returns described in Section 1.2.

         1.2. PRE-DISTRIBUTION TAX PERIOD TFS CONSOLIDATED RETURNS. TFS will
prepare, with the assistance of the Brillian Affiliates, the consolidated
Federal Tax Returns and Combined State Tax Returns of the TFS Consolidated Group
for all Pre-Distribution Tax Periods. Except as provided in the next sentence
with respect to such Returns, TFS shall determine (a) the manner in which any
Tax Item shall be reported, (b) whether any extensions should be requested, and
(c) the elections that will be made by any TFS Affiliate. Subject to TFS's
approval, Brillian may decide (a) the manner in which any Brillian Tax Item of
any Brillian Affiliate shall be reported, and (b) the elections that will be
made by any Brillian Affiliate. TFS shall have the exclusive right to (a) file,
prosecute, compromise, or settle any claim for refund, and (b) determine whether
any refunds to which the TFS Consolidated Group may be entitled shall be
received by way of refund or credit against the Tax liability of the TFS
Consolidated Group.

         1.3. ALLOCATION. TFS may, at its option, elect and the Brillian
Affiliates shall, if necessary for a valid election, join TFS in electing to
ratably allocate Tax Items of the Brillian Affiliates in accordance with
relevant provisions of the Treasury Regulations Section 1.1502-76. If TFS
exercises its option to make the election, each Brillian Affiliate will provide
a statement stating its consent to such election as required under the
regulations.

         1.4. OTHER BRILLIAN RETURNS. Brillian shall be solely responsible for
the preparation and filing of all other Returns of the Brillian Affiliates other
than Returns described in Section 1.2. Brillian shall be responsible for paying
to the applicable Tax Authorities all Taxes shown as due from Brillian or any
Brillian Affiliates on such Returns.

         1.5. POST-DISTRIBUTION CONDUCT OF BRILLIAN. On or after the
Distribution Date, Brillian will not, nor will it permit any Brillian Affiliate
to, make or change any accounting method, change its taxable year, amend any
Return or take any Tax position on any Return, take any other action, omit to
take any action, or enter into any transaction that may reasonably be expected
to result in or does result in any increased Tax liability or reduction of any
Tax Asset of the TFS Consolidated Group or any TFS Affiliate.

         1.6. DEDUCTIONS AND CERTAIN TAXES RELATED TO OPTIONS. TFS shall file
Returns claiming (a) the Tax deductions attributable to options to purchase
stock of TFS or other TFS long-term incentive compensation held by employees and
former employees of any Brillian Affiliate, (b) any deductions for current or
deferred compensation incurred or paid by TFS, and (c) any other similar
compensation-related Tax deductions. The Returns of the TFS Affiliates and the
Brillian Affiliates shall reflect the entitlement of TFS to such deductions. TFS
shall prepare and file all applicable Returns and pay the related Tax liability
under the Federal Insurance Contributions Act, the Federal Unemployment Tax Act,
or any state employment tax law.

                                       2
<PAGE>

                                   SECTION 2
                                   TAX SHARING

         2.1. GENERAL. For each tax period of the TFS Consolidated Group
beginning on or after January 1, 2003 during which any Tax Item of any Brillian
Affiliate is includible in the consolidated Federal Tax Return of the TFS
Consolidated Group, Brillian shall pay to TFS an amount equal to the Brillian
Federal Tax Liability, and for each tax period beginning on or after January 1,
2003 during which any Tax Item of any Brillian Affiliate is includible in a
Return relating to a Combined State Tax, Brillian shall pay to TFS an amount
equal to the Brillian Combined State Tax Liability for such tax period, each as
shown on the Pro Forma Returns.

         2.2. ESTIMATED PAYMENTS. TFS shall determine the amount of the
corresponding Brillian Federal Tax Liability, or the Brillian Combined State Tax
Liability, as the case may be, in connection with any TFS Installment Payment
made with respect to any Pre-Distribution Tax Period. TFS shall provide Brillian
with notice of such determination no later than 10 days before the date that the
applicable payment by TFS is due. Brillian shall, no later than one day prior to
the due date of TFS's payment, pay to TFS the amount so determined.

         2.3. PAYMENT OF TAXES AT YEAR-END.

                  (a) Not later than 30 days after the due date (including all
extensions) for the TFS Consolidated Group's Federal Tax Return, TFS shall
deliver to Brillian a pro forma Federal Tax Return (a "Pro Forma Federal
Return") reflecting the Brillian Federal Tax Liability. Not later than 30 days
after the due date (including all extensions) for each Combined State Tax
Return, TFS shall deliver to Brillian the relevant pro forma Combined State Tax
Return (each a "Pro Forma Combined State Return" and together with the Pro Forma
Federal Return, the "Pro Forma Returns") reflecting the relevant Brillian
Combined State Tax Liability. The Pro Forma Returns shall be prepared in good
faith in a manner generally consistent with past practice. Each Pro Forma Return
shall be delivered together with a statement showing a calculation of the amount
to be paid pursuant to Section 2.3(b).

                  (b) Not later than 10 days after the receipt of each Pro Forma
Return, Brillian shall pay to TFS, or TFS shall pay to Brillian, as appropriate,
an amount equal to the difference, if any, between (i) the Brillian Federal Tax
Liability, if any, or (ii) the Brillian Combined State Tax Liability, if any, as
the case may be, reflected on such Pro Forma Return for such period and the
aggregate of any payments made by Brillian pursuant to Section 2.2 in respect of
such period.

         2.4. TAX ADJUSTMENTS.

                  (a) Except as otherwise provided in this Agreement, TFS shall
be liable for any Tax increase, and shall be entitled to any refund or other
benefit, that results from any Tax Proceeding relating to any Tax Return of the
TFS Consolidated Group other than those resulting from the Brillian Federal Tax
Liability. Except as otherwise provided in this Agreement, Brillian shall be
liable for any Tax increase, and shall be entitled to any Tax refund or other
benefit, that results from any Tax Proceeding relating to any Tax Return of any
Brillian Affiliate other than a Tax Return of the TFS Consolidated Group or a
TFS Affiliate.

                  (b) If any Tax Proceeding described in Section 2.4(a) (other
than an adjustment described in Section 2.4(d)) results in (i) an increase or
decrease in a Tax Item of either a TFS Affiliate or a Brillian Affiliate, for a
particular tax period, and (ii) a corresponding increase or decrease in a Tax
Item of the other party for a different period (other than by way of Tax
carrybacks or carryovers), the party incurring a Tax benefit shall pay to the
party incurring a Tax detriment the lesser of the amount

                                       3
<PAGE>

of such benefit and the amount of such detriment. The amount of any payments
made pursuant to this Section 2.4 shall be determined by employing the highest
rate of Tax specified in Section 11(b) of the Code or the corresponding
provision of any applicable state or local Tax. The amount of any Tax benefit or
detriment shall be determined taking into account interest received from or paid
to the relevant Tax Authority. Payments required under this Section 2.4(b) shall
be made at the later of (i) such time or times that the Tax benefits is realized
as a refund, a reduction of Tax shown on a Return, or a result of a Tax
Authority offsetting the amount due, and (ii) such time or times that the Tax
detriment is realized as an additional assessed amount or as an increase of Tax
shown on a Return. The party incurring the Tax detriment shall have the right to
review the Tax benefit utilization by the other party.

                  (c) In the event that as a result of a Final Determination or
otherwise, TFS is liable for a Tax relating to the Assigned Employees for which
it is not compensated by Brillian under the Master Separation and Distribution
Agreement, Brillian shall pay TFS an amount equal to such Tax, excluding any
portion of such Tax that relates to penalties.

                  (d) In the event that there is a Final Determination that
results in a disallowance of a deduction taken by a TFS Affiliate pursuant to
Section 1.6, Brillian shall pay to TFS an amount equal to such disallowance
determined by employing the highest rate of Tax specified in Section 11(b) of
the Code or the corresponding provision of any applicable state or local law.

         2.5. ALLOCATION OF TAX ASSETS.

                  (a) Except as set forth in Section 2.5(b), and except to the
extent applicable law or regulations expressly so require, no Tax Assets will be
allocated to any Brillian Affiliate for use in Post-Distribution Tax Periods.
TFS will allocate to a Brillian Affiliate only that portion, if any, of
particular Tax Assets for use in Post-Distribution Tax Periods as applicable law
or regulations expressly require to be so allocated.

                  (b) TFS shall allocate to Brillian a portion of the credit
arising as a result of a payment by TFS under Section 55 of the Code.

         2.6. RESEARCH CREDITS. TFS will make the allocations to Brillian
required under Section 41(f)(3) of the Code. Brillian agrees that it shall not
deviate from the amount of qualified research expenditures allocated to it by
TFS.

         2.7. BRILLIAN CARRYBACKS. Whenever permitted to do so by applicable
law, Brillian shall elect to relinquish any carryback period which would include
any Pre-Distribution Tax Period.

         2.8. USE OF BRILLIAN TAX ASSETS. TFS shall have no obligation to
indemnify Brillian for the use by any TFS Affiliate of any Tax Asset of any
Brillian Affiliate.

         2.9. SEPARATION TAXES. Notwithstanding any other provision of this
Agreement or of any other agreement between a TFS Affiliate and a Brillian
Affiliate, Brillian shall bear the burden of any Section 355 Tax. In addition,
Brillian shall bear the burden of: (a) any transfer (including sales and use,
real estate transfer, and property taxes), stamp, recording, or similar Tax
imposed in connection with the Separation and the Distribution on a TFS
Affiliate or a Brillian Affiliate, including any Foreign Taxes that are not
"income, war profits, and excess profits taxes" within the meaning of Part II of
Subchapter A of Chapter 1 of the Code; and (b) any Separation Tax for which a
Brillian Affiliate otherwise has an obligation to indemnify TFS under a
provision of this Agreement other than this Section 2.9. TFS shall bear the
burden of all other Separation Taxes.

                                       4
<PAGE>

         2.10. EMPLOYEE STOCK OPTIONS. The income tax deduction with respect to
TFS stock options and Brillian stock options exercised by employees of TFS shall
be allocated to TFS. The income tax deduction with respect to TFS stock options
and Brillian stock options exercised by employees of Brillian shall be allocated
to Brillian. Upon the exercise of TFS stock options by Brillian employees or
Brillian stock options by TFS employees, TFS or Brillian, as the case may be,
shall take such action as necessary to insure that the income tax withholding of
the employee exercising the stock option is collected and deposited in
accordance with the Code and Treasury Regulations.

                                   SECTION 3
                          REPRESENTATIONS AND COVENANTS

         3.1. REPRESENTATIONS.

                  (a) BRILLIAN REPRESENTATIONS. Each Brillian Affiliate
represents that the information and representations furnished in any Ruling
Document (as modified, qualified, or elaborated in any subsequent Ruling
Document) are accurate and complete as of the date hereof, to the extent that
such information and representations relate to a Brillian Affiliate or the
business or activities of such entity.

                  (b) TFS REPRESENTATIONS. Each TFS Affiliate represents that,
as of the date hereof, there is no plan or intention to take any action
inconsistent with the information and representations furnished in any Ruling
Document (as modified, qualified, or elaborated in any subsequent Ruling
Document).

                  (c) BRILLIAN AND TFS REPRESENTATIONS. Each Brillian Affiliate
and each TFS Affiliate, respectively, represents that, as of the date hereof, it
is not aware of any plan or intention by the current stockholders of TFS to
sell, exchange, transfer by gift, or otherwise dispose of any of their stock in,
or securities of, TFS or Brillian subsequent to the Distribution, except as
described in any Ruling Document (as modified, qualified, or elaborated in any
subsequent Ruling Document).

                  (d) BRILLIAN AND TFS COVENANTS. Each Brillian Affiliate and
each TFS Affiliate, respectively, covenants (i) to use its best efforts to
verify that the foregoing representations made by it in this Section 3.1 are
accurate and complete as of the Distribution Date, and (ii) if, after the date
hereof, it obtains information indicating, or otherwise becomes aware, that any
such representations are or may be inaccurate or incomplete, promptly to inform
TFS or Brillian, as the case may be.

         3.2. BRILLIAN COVENANTS. Brillian covenants to TFS that:

                  (a) No Brillian Affiliate will take any action or fail to take
any action, which action or failure to act would cause the Separation and the
Distribution to fail to qualify under Sections 351(a), 355(a), and 368(a)(1)(D)
of the Code or any corresponding provision of state or local law. Without
limiting the foregoing, the Brillian Affiliates covenant to TFS that:

                           (i) During the two-year period following the
Distribution Date, Brillian will not liquidate, merge, or consolidate with any
other person.

                           (ii) During the two-year period following the
Distribution Date, the Brillian Affiliates will not sell, exchange, distribute,
or otherwise dispose of assets except in the ordinary course of business.

                                       5
<PAGE>

                           (iii) Following the Distribution, Brillian will, for
a minimum of two years, continue the active conduct of the historic business as
transferred to it in the Separation.

                           (iv) No Brillian Affiliate will take any action
inconsistent with the information and representations in the Ruling Documents.

                           (v) No Brillian Affiliate will repurchase stock of
Brillian in a manner contrary to the requirements of Revenue Procedure 96-30 or
in a manner contrary to the representations made in the Ruling Documents.

                           (vi) No Brillian Affiliate will enter into any
negotiations, agreements, or arrangements with respect to any of the foregoing.

                  (b) No Brillian Affiliate will take or omit to take any action
that results in any Separation Tax being imposed on any TFS Affiliate in excess
of the amount of such Separation Tax for which TFS or such TFS Affiliate would
be liable under applicable law, based on:

                           (i) any specific agreements between a TFS Affiliate
and a Brillian Affiliate as to the manner in which the Separation and
Distribution and any other relevant transactions are to be treated for tax
purposes, and

                           (ii) to the extent not contrary to the agreements
described in Section 3.2(b)(i), the form of the Separation and Distribution and
any other relevant transactions as set forth in agreements between the TFS
Affiliates and the Brillian Affiliates.

                  (c) Within the two-year period following the Distribution,
Brillian will not take any action (including stock issuances, whether pursuant
to the exercise of options (or similar interests) or otherwise, option grants,
capital contributions, or redemptions) or omit to take any action which may,
either alone or in combination with actions or omissions by Brillian or any
other party, result in the imposition of any Section 355 Tax.

         3.3. EXCEPTIONS. The Brillian Affiliates may take actions inconsistent
with the covenants contained in Section 3.2, if:

                  (a) Brillian obtains an opinion of counsel, which counsel and
which opinion are acceptable to TFS in its sole discretion, to the effect that
such actions will not result in the imposition of any additional Separation Tax
on a TFS Affiliate and will not affect the status of the Separation and the
Distribution as tax-free to TFS and its stockholders, it being understood that
TFS agrees to cooperate with Brillian and use its reasonable best efforts to
assist Brillian in Brillian's attempting to obtain, as expeditiously as
possible, any opinion described in this Section 3.3(a); or

                  (b) TFS obtains a Supplemental Ruling in accordance with
Section 3.4.

         3.4. SUPPLEMENTAL RULINGS.

                  (a) TFS agrees that at the reasonable request of Brillian, TFS
shall cooperate with Brillian and use its reasonable best efforts to seek to
obtain, as expeditiously as possible, a Supplemental Ruling or other guidance
from a Tax Authority for the purpose of confirming (i) the continuing validity
of any ruling (including another Supplemental Ruling) previously issued by the
IRS or any other Tax Authority, or (ii) compliance on the part of a Brillian
Affiliate with its obligations under Section 3.2. However, TFS shall not be
obligated to seek a Supplemental Ruling unless it reasonably

                                       6
<PAGE>

believes that the relevant Tax Authority would issue such a ruling. Further, in
no event shall TFS file a request for a Supplemental Ruling unless Brillian
represents that (i) it has read the request for the Supplemental Ruling and any
materials, appendices, and exhibits submitted or filed therewith ("Supplemental
Ruling Documents"), and (ii) all information (other than information provided by
an external expert) and representations, if any, relating to any Brillian
Affiliate contained in the Supplemental Ruling Documents are true, correct, and
complete in all material respects. Brillian shall reimburse TFS for all
reasonable costs and expenses incurred by TFS in obtaining a Supplemental Ruling
requested by Brillian. Brillian hereby agrees that TFS shall have sole and
exclusive control over the process of obtaining a Supplemental Ruling, and that
only TFS shall apply for a Supplemental Ruling. Brillian further agrees that it
shall not seek any guidance from the IRS or any other Tax Authority concerning
the Separation and the Distribution except as set forth in this Section 3.4.

                  (b) If TFS determines to obtain a Supplemental Ruling or other
guidance after the date of this Agreement: (i) TFS shall keep Brillian informed
in a timely manner of all material actions taken or proposed to be taken in
connection therewith; (ii) TFS shall (A) reasonably in advance of the submission
of any such Supplemental Ruling Documents, provide Brillian with a draft copy
thereof, (B) reasonably consider Brillian's comments on such draft copy, and (C)
provide Brillian with a final copy of the Supplemental Ruling Documents; and
(iii) TFS shall provide Brillian with notice reasonably in advance of, and
Brillian shall have the right to attend, any formally scheduled meetings with
the Tax Authority (subject to the approval of the Tax Authority) that relate to
such Supplemental Ruling.

                                   SECTION 4
                                   INDEMNITIES

         4.1. BRILLIAN INDEMNITY. Each Brillian Affiliate will jointly and
severally indemnify each TFS Affiliate against and hold them harmless from:

                  (a) any state and local Tax of any Brillian Affiliate, and any
Foreign Tax of a Brillian Affiliate, excluding any Combined State Tax and
excluding (for purposes of this Section 4.1(a)) any Separation Tax;

                  (b) any liability or damage (including Separation Taxes)
resulting from a violation by a Brillian Affiliate of (i) any representation or
covenant in a Ruling Document (as such representation or covenant is modified,
qualified, or elaborated in any subsequent Ruling Document), (ii) any
representation, covenant, or other agreement set forth in this Agreement, or
(iii) any agreements or covenants between a TFS Affiliate and a Brillian
Affiliate pertaining to Tax matters;

                  (c) any Section 355 Tax;

                  (d) any Separation Tax allocated to Brillian under this
Agreement;

                  (e) any Tax increase or Tax detriment allocated to Brillian
under Section 2.4;

                  (f) any Tax imposed on a TFS Affiliate as a result of
Brillian's failure to cooperate with TFS under Section 5;

                  (g) any Tax increase to TFS resulting from Brillian's adoption
of a position inconsistent with the allocation set out in Section 2.6;

                                       7
<PAGE>

                  (h) all liabilities, costs, expenses (including, without
limitation, reasonable expenses of investigation and attorneys' fees and
expenses), losses, damages, assessments, settlements, or judgments arising out
of or incident to the imposition, assessment, or assertion of any tax liability
or damage described in Section 4.1(a), (b), (c), (d), (e), (f) or (g) including
those incurred in any contest relating to the imposition, assessment, or
assertion of any such tax, liability, or damage.

         4.2. TFS INDEMNITY. Each TFS Affiliate will jointly and severally
indemnify each Brillian Affiliate against and hold them harmless from:

                  (a) any TFS Consolidated Group Tax liability other than the
Brillian Federal Tax Liability;

                  (b) any separate state or local Tax and any Foreign Tax of a
TFS Affiliate;

                  (c) any liability or damage (including Separation Taxes)
resulting from a violation by a TFS Affiliate of any representation or covenant
in a Ruling Document (as such representation or covenant is modified, qualified,
or elaborated in any subsequent Ruling Document);

                  (d) any Tax liability resulting from an acquisition by one or
more persons of a "fifty percent or greater interest" (within the meaning of
Section 355(d)(4) of the Code) in TFS;

                  (e) any Separation Tax allocated to TFS under this Agreement;

                  (f) any Tax increase or Tax detriment allocated to TFS under
Section 2.4;

                  (g) any Tax imposed on a Brillian Affiliate (other than a
Separation Tax) as a result of TFS's failure to cooperate with Brillian under
Section 5; and

                  (h) all liabilities, costs, expenses (including, without
limitation, reasonable expenses of investigation and attorneys' fees and
expenses), losses, damages, assessments, settlements, or judgments arising out
of or incident to the imposition, assessment, or assertion of any tax liability
or damage described in Section 4.2(a), (b), (c), (d), (e), (f) or (g) including
those incurred in any contest relating to the imposition, assessment, or
assertion of any such tax, liability, or damage; provided, however, that TFS
will not be required to indemnify Brillian under this Section 4.2 to the extent
that any liability set forth in this Section 4.2 is described in Section 4.1.

         4.3. DISCHARGE OF INDEMNITY. The Brillian Affiliates and the TFS
Affiliates, respectively, shall discharge their obligations under Sections 4.1
and 4.2, respectively, by paying the relevant amount to the indemnified party no
later than 30 days after the date of receiving notice from TFS or Brillian of a
payment made, or a liability of a specified amount, based on a Final
Determination.

         4.4. AFFILIATES. TFS agrees and acknowledges that TFS shall be
responsible for the performance of the obligations of each TFS Affiliate under
this Agreement. Brillian agrees and acknowledges that Brillian shall be
responsible for the performance of the obligations of each Brillian Affiliate
under this Agreement.

         4.5. APPLICATION TO PRESENT AND FUTURE SUBSIDIARIES. This Agreement is
being entered into by TFS and Brillian on behalf of themselves and each TFS
Affiliate and each Brillian Affiliate, respectively. This Agreement shall
constitute a direct obligation of each such affiliate and shall be deemed to
have been readopted and affirmed on behalf of any corporation or other entity
which becomes a TFS Affiliate or a Brillian Affiliate in the future.

                                       8
<PAGE>

         4.6. DISPOSITION OF A TFS AFFILIATE. If a corporation or other entity
ceases to be a TFS Affiliate as a result of a disposition of equity interests in
such entity, such entity shall be released from its obligations under this
Agreement upon such disposition and no TFS Affiliate shall have any obligation
to indemnify any Brillian Affiliate under Section 4.2 for any liability or
damage attributable to actions taken by such entity after such disposition.

                                   SECTION 5
                         COOPERATION AND TAX PROCEEDINGS

         5.1. CONSULTATION AND COOPERATION. Brillian and TFS shall consult and
cooperate (and shall cause each Brillian Affiliate or each TFS Affiliate,
respectively, to consult and cooperate) fully at such time and to the extent
reasonably requested by the other party in connection with all matters subject
to this Agreement. Such cooperation shall include:

                  (a) the retention, consistent with TFS's past practice, of all
information pertaining to Tax matters relating to the TFS Affiliates and the
Brillian Affiliates for the Pre-Distribution Tax Periods, until two years after
the expiration of all applicable statutes of limitation (giving effect to any
extension, waiver, or mitigation thereof), including all books, records,
documentation, or other information relating thereto, and including the items
specified in Exhibit A;

                  (b) the provision, upon reasonable request, of the
information described in Section 5.1(a), including any necessary explanations
of such information, and including access to the necessary personnel to provide
such information or explanations and including the information referenced in
Exhibit A;

                  (c) the execution of any document that may be necessary or
helpful in connection with any required Return or in connection with any audit,
proceeding, suit, or action; and

                  (d) the procurement of any documentation from a governmental
authority or a third party that may be necessary or helpful in connection with
the foregoing.

Such cooperation also shall include the matters set forth in Section 5.2.

         5.2. PROVISION OF TAX RETURN INFORMATION.

                  (a) Brillian shall provide TFS all documents and information,
and make available employees and officers of the Brillian Affiliates, as TFS
reasonably requests to prepare any Return described in Section 1.2 or to contest
any Tax Proceeding for any such Return. Without limiting the foregoing, in this
regard, Brillian agrees to provide the information set forth in Exhibit B to
this Agreement, on or before the dates set forth therein, with respect to the
TFS Consolidated Group Return for Federal Taxes for 2003, and any Combined State
Tax Returns for 2003.

                  (b) In the case of any Return for a Pre-Distribution Tax
Period that is in TFS's possession and is filed after the date of this
Agreement, TFS shall provide Brillian access to and allow Brillian to copy that
portion of each such Return to the extent it relates to any Brillian Affiliate,
together with all related Tax accounting work papers, not later than 30 days
after the date of filing of such Return.

                  (c) In the case of any Return in TFS's possession that was
filed before the date of this Agreement, TFS shall use reasonable efforts to
provide Brillian access to and allow Brillian to copy that portion of each such
Return to the extent that it relates to any Brillian Affiliate together with all

                                       9
<PAGE>

related Tax accounting work papers, beginning as soon as reasonably practicable
after the date of this Agreement, but in no event beginning later than 15 days
after the Distribution Date.

                  (d) After the date of this Agreement, TFS shall afford
Brillian access to employees of TFS on a mutually convenient basis during normal
business hours to the extent such access may reasonably be required by Brillian
to prepare any Return including any Post-Distribution Tax Period Return of
Brillian or to contest any Tax Proceeding.

Notwithstanding any other provision of this Agreement, no TFS Affiliate shall be
required to provide any Brillian Affiliate access to or copies of (i) any
information with respect to which any TFS Affiliate is entitled to assert the
protection of any Privilege, or (ii) any information as to which any TFS
Affiliate is subject to an obligation to maintain the confidentiality of such
information. TFS shall use reasonable efforts to separate any such information
from any other information to which Brillian is entitled to access or to which
Brillian is entitled to copy under this Agreement, to the extent consistent with
preserving TFS's rights under this Section 5.

         5.3. FAILURE TO COOPERATE.

                  (a) Brillian shall be liable for any Tax imposed on any TFS
Affiliate that results from the failure of any Brillian Affiliate (A) to
cooperate under Section 5.1 or (B) to keep and to make available to TFS the
records provided to Brillian by any TFS Affiliate.

                  (b) TFS shall be liable for any Tax imposed on any Brillian
Affiliate (other than a Separation Tax) as a result of the failure of any TFS
Affiliate to cooperate under Section 5.1.

         5.4. PROVISION OF INFORMATION RELATING TO MATERIAL DEVELOPMENTS. TFS
and Brillian shall keep each other fully informed with respect to any material
development relating to the matters subject to this Agreement. The obligations
of TFS and Brillian described in the preceding sentence shall include the
obligations of the parties to inform one another as set forth in Section 5.5.

         5.5. TAX PROCEEDINGS.

                  (a) IN GENERAL.

                           (i) Brillian shall have the exclusive right, in its
sole discretion, to control, contest, and represent the interests of any
Brillian Affiliate in any Tax Proceeding relating to any Return described in
Section 1.4 and to resolve, settle, or agree to any deficiency, claim, or
adjustment proposed, asserted, or assessed in connection with or as a result of
any such Tax Proceeding. Brillian shall consult with TFS regarding Brillian's
conduct of any such Tax Proceeding the outcome of which may have an impact on
the Tax liability of a TFS Affiliate and shall promptly notify TFS of the
commencement of such Tax Proceeding. After the Distribution Date, TFS and
Brillian shall cooperate in order to transfer to Brillian the exclusive right
described in the preceding sentence.

                           (ii) TFS shall have the exclusive right, in its sole
discretion, to control, contest, and represent the interests of any TFS
Affiliate or any Brillian Affiliate in any Tax Proceeding not specified in
Section 5.5(a)(i), and to resolve, settle or agree to any deficiency, claim, or
adjustment proposed, asserted, or assessed in connection with or as a result of
any such Tax Proceeding. TFS's rights shall extend to any matter pertaining to
the conduct, management, and control of a Tax Proceeding, including execution of
waivers, choice of forum, scheduling of conferences, and the resolution of any
Tax Item. Brillian agrees that no claim against TFS and no defense to Brillian's

                                       10
<PAGE>

liabilities to TFS under this Agreement shall arise from the resolution by TFS
of any deficiency, claim, or adjustment relating to the redetermination of any
Tax Item.

                  (b) NOTICE. If after the Distribution Date any TFS Affiliate
receives written notice of, or relating to, a Tax Proceeding from a Tax
Authority that asserts, proposes, or recommends a deficiency, claim, or
adjustment that, if sustained, would result in any Separation Taxes for which
Brillian could be responsible under this Agreement, TFS shall notify Brillian in
writing of such deficiency, claim, or adjustment within 30 days of its receipt.
If any Brillian Affiliate receives written notice of or relating to a Tax
Proceeding from a Tax Authority with respect to a Return described in Section
1.2, Brillian shall provide a copy of such notice to TFS within 30 days of
receiving such notice of such Tax Proceeding, provided that in no case shall
such notice be provided later than 30 days before a response is required to be
provided to the relevant Tax Authority.

                  (c) PARTICIPATION RIGHTS. If a Tax Authority asserts,
proposes, or recommends a deficiency, claim, or adjustment that, if sustained,
would result in Separation Taxes for which Brillian could be responsible under
this Agreement:

                           (i) in the case of any material correspondence or
filing submitted to the Tax Authority or any judicial authority that relates to
the merits of such deficiency, claim or adjustment, TFS shall (A) reasonably in
advance of such submission, but subject to applicable time constraints imposed
by such Tax Authority or judicial authority, provide Brillian with a draft copy
of the portion of such correspondence or filing that relates solely to such
deficiency, claim, or adjustment, (B) consider, subject to applicable time
constraints imposed by such Tax Authority or judicial authority, Brillian's
comments on such draft copy of such correspondence or filing, and (C) provide
Brillian with a final copy of the portion of such correspondence or filing that
relates solely to such deficiency, claim, or adjustment.

                           (ii) If Brillian acknowledges in writing to TFS that,
as between Brillian and TFS, each Brillian Affiliate shall be jointly and
severally liable for an amount equal to 100% of any such Separation Taxes that
are determined pursuant to a Final Determination, then (A) TFS shall take all
actions requested by Brillian to contest such deficiency, claim, or adjustment,
including administrative and judicial proceedings, (B) Brillian shall have the
right to fully participate with respect to such deficiency, claim, or adjustment
and related proceedings and TFS shall accept all reasonable suggestions by
Brillian in connection with the management and substance of such proceedings,
and (C) in no event shall TFS settle or compromise any such deficiency, claim,
or adjustment without the written consent of Brillian, which consent shall not
be unreasonably withheld or delayed.

                                   SECTION 6
                         PAYMENTS AND DISPUTE RESOLUTION

         6.1. PAYMENTS.

                  (a) PROCEDURE FOR MAKING PAYMENTS. All payments required to be
made under this Agreement shall be made in immediately available funds. Except
as otherwise provided in this Agreement, all payments required to be made
pursuant to this Agreement will be due 30 days after the receipt of notice of
such payment being owed. Payments shall be deemed made when received.

                  (b) SETOFF. No party shall set off any payment due to such
party or one of its affiliates against any payment required to be made under
this Agreement by such party or one of its affiliates to the other party or one
of its affiliates.

                                       11
<PAGE>

                  (c) INTEREST ON LATE PAYMENTS. Any payment required to be made
pursuant to this Agreement that is not made on or before the due date for such
payment shall bear interest from the date after the due date to and including
the date of payment at a rate determined under Code Section 6621(a)(2). Such
interest shall be paid at the same time as the payment to which it relates. Any
interest payable pursuant to the preceding sentence that is not paid when due
shall bear interest computed in the manner described in the preceding sentence.

                  (d) CHARACTER OF PAYMENTS. For Tax purposes, the parties agree
to treat any payment (other than payments of interest pursuant to Section 6.1(c)
of this Agreement and After Tax Amounts) pursuant to this Agreement as a capital
contribution by TFS to Brillian or a distribution by Brillian to TFS made in the
last tax period beginning before the Distribution and, accordingly, as not
includible in the taxable income of the recipient and not deductible by the
payor. If pursuant to a Final Determination it is determined that the receipt or
accrual of any payment made under this Agreement (other than payments of
interest pursuant to Section 6.1(c)) is subject to any Tax, the party making
such payment shall be liable for the After Tax Amount with respect to such
payment. A party may choose not to specify an After Tax Amount in a demand for
payment pursuant to this Agreement without thereby being deemed to have waived
its right subsequently to demand an After Tax Amount with respect to such
payment.

         6.2. DISPUTE RESOLUTION.

                  (a) SCOPE OF SECTION. This Section 6.2 shall govern all
disputes under this Agreement.

                  (b) INITIAL NOTICE OF DISAGREEMENT.

                           (i) The party (the "Remitting Party") receiving a
schedule or other notice regarding a payment required pursuant to this Agreement
shall have 30 days from the date of the delivery of such schedule or other
notice to register its disagreement with all or a portion of such payment (each
such disagreement a "Disputed Item").

                           (ii) The Remitting Party shall register its
disagreement by delivering to the other party (the "Recipient") within such 30
day period a written notice (an "Initial Notice of Disagreement") that (A)
specifically enumerates each Disputed Item, (B) describes the grounds for the
Remitting Party's disagreement with each Disputed Item, and (C) states the
amount in dispute (or a good faith estimate thereof) with respect to each
Disputed Item.

                           (iii) If, within the 30 day period described in
Section 6.2(b)(i), the Remitting Party does not deliver an Initial Notice of
Disagreement that satisfies the requirements of Section 6.2(b)(ii) with respect
to all or a portion of a payment described in Section 6.2(b)(i), then the
Remitting Party will be deemed to have (A) accepted and acknowledged its
liability for such payment or portion thereof, and (B) waived its right to a
Determination by an Independent Third Party pursuant to Section 6.2(f) with
respect to such payment or portion thereof.

                  (c) NEGOTIATION. During the 60 day period immediately
following delivery of an Initial Notice of Disagreement that satisfies the
requirements of Section 6.2(b)(ii), the Remitting Party and the Recipient shall
in good faith attempt to resolve their disagreements over each Disputed Item
enumerated in the Initial Notice of Disagreement.

                  (d) FINAL NOTICE OF DISAGREEMENT.

                                       12
<PAGE>

                           (i) The Remitting Party shall have 70 days from the
delivery of an Initial Notice of Disagreement to register its continued
disagreement with any Disputed Item and to elect to seek a Determination by an
Independent Third Party with respect to such Disputed Item pursuant to Section
6.2(f). The Remitting Party shall do so by delivering to the Recipient within
such 70 day period a written notice (a "Final Notice of Disagreement") that (A)
specifically enumerates each Disputed Item with respect to which it elects to
seek a Determination by an Independent Third Party, (B) describes the grounds
for the Remitting Party's continued disagreement with each such Disputed Item,
and (C) states the amount in dispute (or a good faith estimate thereof) with
respect to each such Disputed Item.

                           (ii) The failure of the Remitting Party within the 70
day period described in Section 6.2(d)(i) to deliver a Final Notice of
Disagreement, that satisfies the requirements of Section 6.2(d)(i), with respect
to all or a portion of the payment described in Section 6.2(b) shall be deemed
to constitute (A) an acceptance and acknowledgment by such party of its
liability for such payment or portion thereof, and (B) a waiver by such party of
its right to a Determination by an Independent Third Party pursuant to Section
6.2(f) with respect to such Disputed Item.

                           (iii) Any dispute, controversy, or claim relating to
or arising out of a Disputed Item contained in a Notice of Final Disagreement
shall be finally settled by arbitration before an Independent Third Party
pursuant to the provisions of this Section 6.2.

                  (e) SELECTION OF INDEPENDENT THIRD PARTY. If the Remitting
Party delivers a Final Notice of Disagreement that satisfies the requirements of
Section 6.2(d)(i) to the Recipient, the parties shall, within 10 days after such
delivery, jointly select an Independent Third Party to make a Determination with
respect to each Disputed Item enumerated in the Final Notice of Disagreement. If
the parties cannot jointly agree on an Independent Third Party to make such
Determination within such 10 day period, either party may apply to the American
Arbitration Association ("AAA") for the sole purpose of having the AAA select an
Independent Third Party from a list of no fewer than two and no more than five
potential Independent Third Parties which list is acceptable to TFS and
Brillian. If TFS and Brillian fail to approve a list within 15 days of the
application of either party to the AAA, the Independent Third Party shall be
selected by the AAA.

                  (f) DETERMINATION BY INDEPENDENT THIRD PARTY. The Independent
Third Party shall determine the appropriate outcome based upon this Agreement
(the "Determination") with respect to each Disputed Item. The Independent Third
Party shall have 90 days from the date that it is selected in which to make such
Determinations, unless the Remitting Party and the Recipient mutually agree upon
an extension of such period or the Independent Third Party, in its discretion,
determines that an extension of such period is warranted by exceptional
circumstances. The Remitting Party and the Recipient shall provide the
Independent Third Party with such information or documentation as the
Independent Third Party, in its discretion, deems to be necessary for it to make
the Determination requested of it. Any Determination by the Independent Third
Party (as well as any allocation of costs and expenses pursuant to Section
6.2(g)) shall be in writing, shall be delivered to the Remitting Party and the
Recipient, and shall be final and binding upon them and enforced as an
arbitration award under the United States Arbitration Act, 9 U.S.C. sections
1-16. The parties explicitly waive any right to seek any judicial review of the
substance of the Determination of the Independent Third Party. In making a
Determination, the Independent Third Party shall be entitled to use, at the sole
cost and expense of the Remitting Party and the Recipient, whatever resources it
deems necessary, including accounting and technical services provided by firms
chosen by it in its discretion. Any proceedings relating to the determination at
which the presence of any personnel or representatives of both parties is
required shall take place in Phoenix, Arizona.

                                       13
<PAGE>

                  (g) COSTS AND EXPENSES ASSOCIATED WITH INDEPENDENT THIRD
PARTY. The Remitting Party and the Recipient shall be jointly and severally
liable to the Independent Third Party for all costs and expenses associated with
retaining the Independent Third Party. As between themselves, except as
otherwise provided in this Section 6.2(g), the Remitting Party and the Recipient
shall share equally the costs and expenses associated with retaining an
Independent Third Party. Where a determination with respect to a Disputed Item
is not less than 80% of the amount claimed to be due from the Remitting Party,
the Independent Third Party may, in its discretion, allocate to the Remitting
Party more than 50% of the costs and expenses associated with such
determination. Where a determination with respect to a Disputed Item is less
than 50% of the amount claimed to be due from the Remitting Party, the
Independent Third Party may, in its discretion, allocate to the Recipient more
than 50% of the costs and expenses associated with such determination.

                                   SECTION 7
                                  MISCELLANEOUS

         7.1. FURTHER ASSURANCES. TFS and Brillian shall execute, acknowledge,
and deliver, or cause to be executed, acknowledged, and delivered, such
instruments and take such other action as may be necessary or advisable to carry
out their obligations under this Agreement and under any Exhibit, document, or
other instrument delivered pursuant hereto.

         7.2. TERMINATION AND SURVIVAL. All rights and obligations arising
hereunder with respect to a Pre- Distribution Tax Period shall survive until
they are fully effectuated or performed; provided, however, that notwithstanding
anything in this Agreement to the contrary, this Agreement shall remain in
effect and its provisions shall survive for the full period of all applicable
statutes of limitation (giving effect to any extension, waiver, or mitigation
thereof).

         7.3. COSTS AND EXPENSES.

                  (a) ADDITIONAL SERVICES. TFS may provide tax services to
Brillian for compensation approximately the same as that payable between
unrelated parties dealing at arm's length.

                  (b) OTHER. Except as expressly set forth in this Agreement,
each party shall bear its own costs and expenses incurred pursuant to this
Agreement. For purposes of this Agreement, "expenses" shall include, without
limitation, reasonable attorney's fees, accountant's fees, and other related
professional fees and disbursements.

         7.4. ENTIRE AGREEMENT. This Agreement and the Exhibits attached hereto
constitute the entire agreement between the parties with respect to the subject
matter hereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof.

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

         7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is solely for the
benefit of the parties hereto and their respective Subsidiaries, successors, and
permitted assigns and shall not confer upon any other Person any rights or
remedies hereunder.

         7.7. GOVERNING LAW. This Agreement shall be governed, construed, and
enforced in accordance with the laws of the state of Delaware as to all matters
regardless of the laws that might otherwise govern under the principles of
conflicts of laws applicable thereto.

                                       14
<PAGE>

         7.8. NOTICES. Any notice, demand, offer, request or other communication
required or permitted to be given by either party pursuant to the terms of this
Agreement shall be in writing and shall be deemed effectively given the earlier
of (a) when received, (b) when delivered personally, (c) one business day after
being delivered by facsimile (with receipt of appropriate confirmation), (d) one
business day after being deposited with an overnight courier service, or (e)
four days after being deposited in the U.S. mail, First Class with postage
prepaid, and addressed to the attention of the party's Chief Executive Officer
at the address of its principal executive office or such other address as a
party may request by notifying the other in writing.

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

         7.10. BINDING EFFECT AND ASSIGNMENT. Subject to Section 4.5, this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective legal representatives and successors, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement. This Agreement may not be assigned by any party hereto. This
Agreement may be enforced separately by TFS and Brillian.

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

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

         7.13. AUTHORITY. Each of the parties hereto represents to the other
that (a) it has the corporate or other requisite power and authority to execute,
deliver, and perform this Agreement, (b) the execution, delivery, and
performance of this Agreement by it have been duly authorized by all necessary
corporate or other actions, (c) it has duly and validly executed and delivered
this Agreement, and (d) this Agreement is a legal, valid, and binding
obligation, enforceable against it in accordance with its terms subject to
applicable bankruptcy, insolvency, reorganization, moratorium, or other similar
laws affecting creditors' rights generally and general equity principles.

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

                                       15
<PAGE>

         7.15. DEFINITIONS. Unless otherwise defined in this Agreement,
capitalized terms shall have the meanings ascribed thereto in the Master
Separation and Distribution Agreement by and between TFS and Brillian. As used
in this Agreement, the following terms shall have the following meanings:

                  (a) "AAA" shall have the meaning ascribed to such term in
Section 6.2(e) of this Agreement.

                  (b) "AFTER TAX AMOUNT" means an additional amount necessary to
reflect the hypothetical Tax consequences of the receipt or accrual of any
payment, using the maximum statutory rate (or rates, in the case of an item that
affects more than one Tax) applicable to the recipient of such payment for the
relevant tax periods, and reflecting for example, the effect of the deductions
available for interest paid or accrued and for Taxes such as state and local
income Taxes.

                  (c) "AGREEMENT" means this Tax Sharing Agreement.

                  (d) "BRILLIAN AFFILIATE" means Brillian and any corporation or
other entity directly or indirectly controlled by Brillian before, on, or after
the Distribution Date.

                  (e) "BRILLIAN COMBINED STATE TAX LIABILITY" means, with
respect to any tax period beginning on or after January 1, 2003 and any
jurisdiction, an amount of Combined State Taxes determined in accordance with
the principles set forth in the definition of Brillian Federal Tax Liability.

                  (f) "BRILLIAN FEDERAL TAX LIABILITY" means, with respect to
any tax period beginning on or after January 1, 2003, the Federal Tax liability
for such period, computed in accordance with the positions, elections,
accounting methods, conventions, and computational methodology used by TFS in
preparing the TFS Consolidated Group's Return for such period, but taking into
account only the Tax Items of Brillian Affiliates which are included in such
Return for such tax period. Such computation shall be made (i) as though the
highest rate of tax specified in Section 11(b) of the Code (or any other similar
rates applicable to specific types of income) were the only rate set forth in
that subsection, (ii) by taking into account any Tax that would be imposed on
the Brillian Affiliates pursuant to Section 55 of the Code to the extent the TFS
Consolidated Group is subject to such Tax, and (iii) by not permitting the
Brillian Affiliates any compensation deductions arising in respect of any
options on TFS stock, or any TFS restricted stock.

                  (g) "BRILLIAN TAX LIABILITY" means, with respect to any tax
period, the sum of the Brillian Combined State Tax Liability for each
jurisdiction and the Brillian Federal Tax Liability.

                  (h) "CODE" means the Internal Revenue Code of 1986, as amended
from time to time.

                  (i) "COMBINED STATE TAX" means, with respect to each United
States state or local taxing jurisdiction, any income, franchise or similar Tax
payable to such state or local taxing jurisdiction in which a Brillian Affiliate
files Returns with a TFS Affiliate, on a consolidated, combined or unitary basis
for purposes of such Tax.

                  (j) "DETERMINATION" shall have the meaning ascribed to such
term in Section 6.2(f).

                  (k) "DISPUTED ITEM" shall have the meaning ascribed to such
term in Section 6.2(b)(i).

                                       16
<PAGE>

                  (l) "DISTRIBUTION DATE" means the date on which the
Distribution is effected.

                  (m) "FEDERAL TAX" means any Tax imposed under the Code,
including any interest, penalty or other additions to Tax imposed under Subtitle
F of the Code.

                  (n) "FINAL DETERMINATION" means (i) with respect to Federal
Taxes, a "determination" as defined in Section 1313(a) of the Code or execution
of an Internal Revenue Service Form 870AD and, with respect to Taxes other than
Federal Taxes, any final determination of liability in respect of a Tax that,
under applicable law, is not subject to further appeal, review or modification
through proceedings or otherwise, (ii) the expiration of a statute of
limitations or (iii) the payment of or liability for Tax or any other amount
where TFS determines that no action should be taken to recoup such payment or
contest such liability.

                  (o) "FINAL NOTICE OF DISAGREEMENT" shall have the meaning
ascribed to such term in Section 6.2(d)(i).

                  (p) "FOREIGN TAX" means any Tax imposed by a Taxing Authority
of a jurisdiction outside the United States.

                  (q) "INDEPENDENT THIRD PARTY" means a nationally recognized
tax attorney that is a member of a nationally recognized law firm which firm is
independent of both parties.

                  (r) "INITIAL NOTICE OF DISAGREEMENT" shall have the meaning
ascribed to such term in Section 6.2(b)(ii).

                  (s) "IRS" means the Internal Revenue Service.

                  (t) "POST-DISTRIBUTION TAX PERIOD" means (i) any tax period
beginning and ending after the Distribution Date and (ii) with respect to a tax
period that begins on or before and ends after the Distribution Date, such
portion of the tax period that commences on the day immediately after the
Distribution Date.

                  (u) "PRE-DISTRIBUTION TAX PERIOD" means (i) any tax period
beginning and ending before or on the Distribution Date and (ii) with respect to
a period that begins on or before and ends after the Distribution Date, such
portion of the tax period ending on and including the Distribution Date.

                  (v) "PRIVILEGE" means any privilege or similar evidentiary
rule that may be asserted under applicable law including any privilege arising
under or relating to the attorney-client relationship (including the
attorney-client and work product privileges) and any accountant-client
privilege.

                  (w) "PRO FORMA COMBINED STATE RETURN" shall have the meaning
ascribed to such term in Section 2.3(a).

                  (x) "PRO FORMA FEDERAL RETURN" shall have the meaning ascribed
to such term in Section 2.3(a).

                  (y) "PRO FORMA RETURNS" shall have the meaning ascribed to
such term in Section 2.3(a).

                                       17
<PAGE>

                  (z) "RECIPIENT" shall have the meaning ascribed to such term
in Section 6.2(b)(ii).

                  (aa) "REMITTING PARTY" shall have the meaning ascribed to such
term in Section 6.2(b)(i).

                  (bb) "RETURN" means any tax return, statement, report or form
(including estimated tax returns and reports, extension requests and forms,
information returns and reports, amended returns and requests for refunds)
required to be filed with any Tax Authority.

                  (cc) "RULING DOCUMENTS" means (a) any request for a ruling
filed with any Tax Authority together with any supplemental filings or ruling
requests or other materials subsequently submitted on behalf of TFS, its
subsidiaries and/or its stockholders to such Tax Authority, the appendices and
exhibits thereto, and any rulings issued by a Tax Authority to any TFS Affiliate
or Brillian Affiliate, in connection with the Restructuring or (b) any materials
submitted to any outside counsel in connection with obtaining an opinion
relating to the Tax status of the Restructuring.

                  (dd) "SECTION 355 TAX" means any Tax imposed by reason of the
application of Section 355(d) or (e) of the Code or any similar state or local
Tax that would not have been imposed had the Distribution not occurred other
than such a tax resulting from an acquisition by one or more persons of a "fifty
percent or greater interest" (within the meaning of Section 355(d)(4) of the
Code) in TFS.

                  (ee) "SEPARATION TAX" shall mean any Tax imposed in connection
with the Separation and the Distribution on a TFS Affiliate or a Brillian
Affiliate that would not have been imposed had the Separation and the
Distribution not occurred.

                  (ff) "SUPPLEMENTAL RULING" means any ruling issued after the
Distribution Date (a) by the IRS in connection with the Restructuring or (b) by
any other Tax Authority, addressing the application of a provision of the laws
of another jurisdiction to any transaction undertaken in connection with the
Restructuring.

                  (gg) "SUPPLEMENTAL RULING DOCUMENTS" shall have the meaning
ascribed to such term in Section 3.4(a).

                  (hh) "TAX" means any net income, gross income, gross receipts,
alternative or add-on minimum, sales, use, business and occupation, value-added,
trade, goods and services, ad valorem, franchise, profits, license, business
royalty, withholding, payroll, employment, capital, excise, transfer, recording,
severance, stamp, occupation, premium, property, asset, real estate acquisition,
environmental, custom duty, or other tax, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest and any
penalty, addition to tax or additional amount imposed by a Tax Authority.

                  (ii) "TAX ASSET" means any Tax Item that may have the effect
of reducing any Tax, including, without limitation, any net operating loss, net
capital loss, investment tax credit, foreign tax credit, or charitable deduction
or any deductions and credits related to alternative minimum taxes.

                  (jj) "TAX AUTHORITY" means any governmental authority or any
subdivision, agency, commission or authority thereof or any quasi-governmental
or private body having jurisdiction

                                       18
<PAGE>

pursuant to applicable law over the assessment, determination, collection or
imposition of any Tax (including the IRS).

                  (kk) "TAX ITEM" means any item of income, gain, loss,
deduction or credit, or other attribute that may have the effect of increasing
or decreasing any Tax.

                  (ll) "TAX PROCEEDING" means any tax audit, dispute or
proceeding (whether administrative or judicial), including a refund claim or any
proceeding arising therefrom.

                  (mm) "TFS" has the meaning set forth in the prelude to this
Agreement.

                  (nn) "TFS AFFILIATE" means TFS and any corporation or other
entity directly or indirectly controlled by TFS, but excluding any Brillian
Affiliate.

                  (oo) "TFS CONSOLIDATED GROUP" means, at any time, TFS and each
corporation or other entity that joins with TFS, with respect to Federal Taxes,
in the filing of a consolidated Federal Tax Return and with respect to Combined
State Taxes, in the filing of a Combined State Tax Return.

                  (pp) "TFS INSTALLMENT PAYMENT" means (i) any estimated Federal
Tax installment that TFS is required to pay or (ii) any payment required to be
made on the due date, without extensions, of a Return that TFS is required to
file under the Code, or in either case, any corresponding provision of state or
local law.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       19
<PAGE>

         IN WITNESS WHEREOF, the parties have executed and delivered this Tax
Sharing Agreement as of the date first written above.

                                             THREE-FIVE SYSTEMS, INC.

                                             By: /s/ Jeffrey D. Buchanan
                                                --------------------------------
                                             Name: Jeffrey D. Buchanan
                                             Title: Executive Vice President and
                                                    Chief Financial Officer

                                             BRILLIAN CORPORATION

                                             By: /s/ Wayne A. Pratt
                                                --------------------------------
                                             Name: Wayne A. Pratt
                                             Title: Vice President and
                                                    Chief Financial Officer

                                       20<PAGE>

                                                                    EXHIBIT 10.4

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

                        REAL PROPERTY SUBLEASE AGREEMENT

                                 BY AND BETWEEN

                            THREE-FIVE SYSTEMS, INC.

                                       AND

                              BRILLIAN CORPORATION

                                 EFFECTIVE AS OF

                                SEPTEMBER 1, 2003

--------------------------------------------------------------------------------
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                     PAGE
<S>                                                                                                                  <C>
1.   SUBLET PREMISES; USE........................................................................................      1

2.   TERM........................................................................................................      2

3.   RENT........................................................................................................      2

4.   FIXTURES AND EQUIPMENT......................................................................................      3

5.   CONSTRUCTION; ACCEPTANCE....................................................................................      3

6.   REPRESENTATIONS.............................................................................................      3

7.   MASTER LEASE................................................................................................      4

8.   EVENTS OF DEFAULT...........................................................................................      5

9.   REMEDIES OF TFS.............................................................................................      5

10.  ACCESS TO SUBLET PREMISES...................................................................................      5

11.  WAIVERS BY BRILLIAN; HOLDOVER...............................................................................      6

12.  LATE PAYMENT................................................................................................      6

13.  INDEMNITY...................................................................................................      6

14.  MASTER LEASE DEFAULTS.......................................................................................      6

15.  RESTORATION.................................................................................................      7

16.  NOTICES.....................................................................................................      7

17.  BRILLIAN'S INSURANCE........................................................................................      7

18.  ALTERATIONS.................................................................................................      8

19.  CONDEMNATION................................................................................................      9

20.  ASSIGNMENT..................................................................................................      9

21.  NO BROKER...................................................................................................     10

22.  LIABILITY OF TFS............................................................................................     10

23.  EFFECT......................................................................................................     10

24.  DAMAGE OR DESTRUCTION.......................................................................................     10

25.  NOTICE......................................................................................................     11

26.  RELATIONSHIP................................................................................................     11

27.  WAIVERS.....................................................................................................     11

28.  FORUM.......................................................................................................     11

29.  JOINT AND SEVERAL LIABILITY; AUTHORITY......................................................................     11

30.  NO OPTION; CONSENT OF MASTER LANDLORD.......................................................................     11

31.  FORCE MAJEURE...............................................................................................     11
</TABLE>

                                       i

<PAGE>

                                TABLE OF CONTENTS
                                  (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                                     PAGE
<S>                                                                                                                  <C>
32.  WAIVER OF TRIAL BY JURY.....................................................................................     12

33.  TFS'S PURCHASE OF BUILDING..................................................................................     12

34.  GROUND SUBLEASE.............................................................................................     12
</TABLE>

                                       ii

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<S>                                                                                                          <C>
Exhibit A - Copy of Master Lease..........................................................................   A-1

Exhibit B - Copy of Ground Sublease.......................................................................   B-1

Exhibit C - Sublet Premises and Common Areas..............................................................   C-1

Exhibit D - Building Services.............................................................................   D-1

Exhibit E - MIS Services..................................................................................   E-1

Exhibit F - Variable Services.............................................................................   F-1

Exhibit G - Form of Master Landlord's Consent.............................................................   G-1

Exhibit H - Form of Ground Lessor's Consent...............................................................   H-1
</TABLE>

                                      iii

<PAGE>

                        REAL PROPERTY SUBLEASE AGREEMENT

         This Real Property Sublease Agreement (this "Sublease") is entered into
as of September 1, 2003, by and between Three-Five Systems, Inc., a Delaware
corporation, with offices at 1600 North Desert Drive, Tempe, Arizona 85281,
Tempe, Arizona ("TFS"), and Brillian Corporation, having an address at 1600
North Desert Drive, Tempe, Arizona 85281 ("Brillian").

                                    RECITALS

         WHEREAS, pursuant to that certain Lease Agreement dated July 31, 1995
(as amended from time to time, collectively, the "Master Lease"), by and between
The City of Tempe ("Master Landlord"), and TFS, as tenant, TFS leases that
certain building located at 1600 North Desert Drive, Tempe, Arizona 85281
(herein the "Premises or the "Building"), which is more particularly described
in the Master Lease;

         WHEREAS, a true and correct copy of the Master Lease is attached hereto
as Exhibit A and made a part hereof. All capitalized terms not herein defined
shall have the meanings given to them in the Master Lease;

         WHEREAS, pursuant to the Ground Sublease TFS subleases the Land from
Papago Park Center, Inc., an Arizona corporation ("Ground Lessor"); the Ground
Sublease is attached hereto as Exhibit B and made a part hereof; and

         WHEREAS, TFS desires to sublet to Brillian and Brillian desires to
sublet from TFS approximately 42,524 square feet of rentable floor area (the
"Sublet Premises") of the Building, which Sublet Premises are indicated on
Exhibit C attached hereto and made a part hereof.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the mutual promises, covenants, and
conditions hereinafter set forth, and intending to be legally bound hereby, it
is mutually agreed as follows:

         1.       SUBLET PREMISES; USE.

                  (a)      TFS hereby subleases the Sublet Premises to Brillian
and Brillian hereby subleases the Sublet Premises from TFS, subject to the terms
and conditions hereof and the Master Lease. Brillian shall not use the Sublet
Premises for any illegal or improper purpose which shall constitute a nuisance
nor do or suffer anything to be done in or about the Sublet Premises which will
violate any term of the Master Lease, this Sublease, or any laws, rules,
regulations, or ordinances or increase the rate of fire or other insurance or
jeopardize the coverage of the same. Brillian agrees to comply with all of
Master Landlord's rules and regulations relating to the Sublet Premises or the
building in which the Sublet Premises is located.

                  (b)      In the event TFS fails to deliver to Brillian
possession of the Sublet Premises or obtain the consent of the Master Landlord,
TFS shall not be liable for any damages caused thereby, whether or not such
failure is caused by the negligence of TFS or otherwise. In addition, this
Sublease shall not be void or voidable if possession is tendered to Brillian
within forty-five (45) days after the Commencement Date (as hereinafter defined)
and the consent of the Master

                                       1

<PAGE>

Landlord is obtained within such forty-five (45) day period. In such event, the
Commencement Date shall be the later of (i) the date such possession of the
Sublet Premises is so tendered, and (ii) the date TFS obtains the consent of
Master Landlord. In the event that such period elapses and TFS shall not have
tendered possession to Brillian and obtained the consent of the Master Landlord,
this Sublease shall be voidable at Brillian's option upon written notice to TFS,
in which event TFS shall return the Security Deposit, if any, and Brillian shall
have no further rights or remedies hereunder. For purposes of this Sublease,
possession of the Sublet Premises shall be deemed tendered upon TFS's providing
access to Brillian. Brillian's failure to take possession of the Sublet Premises
for any reason when delivered by TFS shall not delay the Commencement Date (as
hereinafter defined).

                  (c)      Brillian shall also have the right to use in common
with TFS (and such other subtenants as from time to time may occupy the
Building) the facilities yard, parking areas, improvements (other than the
Building) located from time to time on the Land, and the common areas described
on Exhibit C attached hereto and made a part hereof (all of the foregoing in
this Paragraph 1(c), the "Common Areas").

         2.       TERM.

                  (a)      Subject to the terms of Paragraph l(b) above, the
initial term of this Sublease shall be for a period of two (2) years (the
"Initial Sublease Term") and shall commence on the date of execution hereof by
TFS (the "Commencement Date") and terminate on August 31, 2005. The Initial
Sublease Term may be extended for additional one year terms (each, a "Renewal
Term") pursuant to the terms and provisions of Paragraph 2(b) below. The Initial
Sublease Term, together with any and all Renewal Terms, is hereinafter
collectively referred to as the "Sublease Term".

                  (b)      Except as set forth in Paragraph 2(c) below, the
Sublease Term shall be automatically extended for successive Renewal Terms
unless Brillian shall give to TFS written notice of its election to terminate
this Sublease at least 180 days prior to the beginning of the first Renewal Term
or any then applicable succeeding Renewal Term.

                  (c)      In the event that TFS desires to terminate this
Sublease as of the expiration of the Initial Sublease Term or any applicable
Renewal Term, TFS shall give to Brillian written notice of its election to
terminate this Sublease at least 180 days prior to the beginning of the first
Renewal Term or any then applicable succeeding Renewal Term.

         3.       RENT.

                  (a)      BASE RENT. During the term of this Sublease, Brillian
covenants and agrees to pay to TFS, without deduction or setoff of any kind,
minimum annual base rent in an amount equal to $202,884.00 (such minimum annual
rent hereinafter called the "Base Sublease Rent"), payable in equal monthly
installments of $16,907.00. The aforesaid monthly Base Sublease Rent has been
calculated as the depreciation amount of the building space leased by Brillian.
The Base Sublease Rent shall be paid in advance on the first day of each month
during the term of this Sublease.

                  (b)      BUILDING SERVICES RENT. During the term of this
Sublease, Brillian covenants and agrees to pay to TFS, without deduction or
setoff of any kind, annual building

                                       2

<PAGE>

services rent in an amount equal to $278,964 ("Building Services Rent") payable
in equal monthly installments of $23,247. The particular services that are
provided by TFS to Brillian and that are covered under Building Services Rent
are enumerated and described in Exhibit D to this Sublease. For purposes of this
Sublease, Building Services Rent shall include all Rent other than Base Rent,
MIS Services Rent, and Variable Rent. Brillian shall pay to TFS this amount on
the first day of each month during the term of this Sublease.

                  (c)      MIS SERVICES RENT. During the term of this Sublease,
Brillian covenants and agrees to pay to TFS, without deduction or setoff of any
kind, a minimum of $37,857 per month as set forth in Exhibit E to this Sublease
("MIS Services Rent"). The particular services that are provided by TFS to
Brillian and that are covered under MIS Services Rent are enumerated and
described in Exhibit E to this Sublease. Brillian shall pay to TFS the MIS
Services Rent in accordance with Exhibit E to this Sublease.

                  (d)      VARIABLE RENT. During the term of this Sublease,
Brillian covenants and agrees to pay to TFS, without deduction or setoff of any
kind, the monthly costs actually incurred for the items enumerated in Exhibit F
to this Sublease ("Variable Services Rent"). Brillian shall pay to TFS this
amount within fifteen (15) days from the receipt of an invoice from TFS.

         4.       FIXTURES AND EQUIPMENT. In the event that, during the term of
this Sublease, a building fixture or piece of maintenance or operating equipment
breaks or fails to work properly, and that fixture or piece of maintenance or
operating equipment is solely used by Brillian under the terms of this Sublease,
then (i) TFS reserves the right to not repair or replace the said fixture or
piece of maintenance or operating equipment, or (ii) in the event that TFS
chooses to repair or replace such fixture or piece of maintenance or operating
equipment, Brillian shall be solely liable for any costs associated with such
action.

         5.       CONSTRUCTION; ACCEPTANCE. Brillian agrees that TFS has no
construction, repair, or replacement obligations hereunder and that Brillian
will accept the Sublet Premises in "as-is" condition; provided, however, TFS
shall deliver the Sublet Premises in the same arrangement and condition as on
the date or the execution of this Sublease. Brillian's taking possession of the
Sublet Premises shall be a conclusive acknowledgement on Brillian's part that
the Sublet Premises are in good and tenantable condition and that Brillian has
accepted the Sublet Premises in "as is" condition as of such date.

         6.       REPRESENTATIONS. TFS hereby warrants and represents that (i)
the Master Lease is presently in full force and effect; (ii) that TFS has the
power and authority to enter into this Sublease; (iii) the copy of the Master
Lease attached hereto as Exhibit A is true, complete, and correct; (iv) the
Master Lease has not been modified or amended and constitutes the full and
complete agreement of the parties thereto relative to the subject matter
thereof; (v) (a) to the best of TFS' knowledge, TFS is not in default under any
of the provisions of the Master Lease, and to the best of TFS' knowledge, no
event or condition exists which with notice or the passage of time or both,
would constitute a default by TFS under the Master Lease, and (b) TFS has
received no notice of any such default, event, or condition from Master Landlord
which remains uncured; (vi) TFS has received no written notice from any
applicable governmental authority of, or alleging any, violation of any
applicable law or regulation, including any environmental laws, with respect to
the Sublet Premises which remains uncured; (vii) TFS has given no written
notices alleging any default

                                       3

<PAGE>

which remains uncured by the Master Landlord under the Master Lease, or that any
event has occurred which, with the passage of time, or the giving of notice, or
both, would constitute an uncured default by the Master Landlord under the
Master Lease, nor to the best of TFS's knowledge, has any event occurred which,
with the passage of time, or the giving of notice, or both, would constitute an
uncured default by Master Landlord under the Master Lease. TFS makes no other
representations or warranties and hereby disclaims same.

         7.       MASTER LEASE.

                  (a)      All the rights and obligations of TFS contained in
the Master Lease as they relate to the Sublet Premises are hereby conferred and
imposed upon Brillian, except as expressly modified and amended by this
Sublease. The rights of TFS in Sections 9, 15, 16, 17, 24(g), and 24(l) of the
Master Lease are expressly not conferred upon Brillian and Brillian expressly
acknowledges that it shall not be entitled to any of the rights of TFS in
Sections 9, 15, 16, 17, 24(g), and 24(l) of the Master Lease. Brillian covenants
and agrees fully and faithfully to perform the terms and conditions of the
Master Lease as they relate to the Sublet Premises and this Sublease on its part
to be performed, including, but not limited to, all maintenance and repair
obligations and all compliance with law obligations. Brillian shall not do or
cause to be done or suffer or permit any act to be done that would or might
cause the Master Lease, or the rights of TFS as tenant under the Master Lease,
to be endangered, canceled, terminated, forfeited, or surrendered, or that would
or might cause TFS to be in default thereunder or liable for any damage, claim,
or penalty. Brillian agrees, as an express inducement for TFS's executing this
Sublease, that if there is any conflict between the provisions of this Sublease
and the provisions of the Master Lease that would permit Brillian to do or cause
to be done or suffer or permit any act or thing to be done that is prohibited by
the Master Lease, then the provisions of the Master Lease shall prevail. All
rights, remedies, and indemnifications given to the Master Landlord in the
Master Lease are hereby given to TFS under this Sublease.

                  (b)      If any event occurs that would permit TFS to
terminate the Master Lease as it relates to the Sublet Premises, Brillian shall
notify TFS of such occurrence and of its recommendations immediately with regard
to such termination rights. TFS shall decide in its reasonable discretion
whether or not to terminate the Master Lease and shall give Brillian written
notice of such decision. If TFS elects to terminate the Master Lease as it
relates to the Sublet Premises, this Sublease shall terminate on the earlier of
the date of termination of the Master Lease or the date which is (30) days after
Brillian's receipt of such written notice from TFS. In the event that TFS elects
to terminate the Master Lease prior to providing notice to the Master Landlord,
TFS must provide prior written notice to Brillian of its intent to terminate
this Sublease, and within five (5) days after the receipt of such notice from
TFS, Brillian may notify TFS in writing that it intends to continue possession
of the Sublet Premises under the terms and conditions of this Sublease, in which
case, TFS shall not exercise its right of termination under the Master Lease as
it relates to the Sublet Premises. In addition, TFS agrees that it shall not
exercise its one-time cancellation option granted under the Second Amendment to
Lease as it relates to the Sublet Premises without the prior written consent of
Brillian.

                  (c)      TFS shall have no duty to perform any obligations of
or provide any services to be provided by the Master Landlord and shall under no
circumstances be responsible or liable to Brillian for any default, failure, or
delay on the part of the Master Landlord in the performance of

                                       4

<PAGE>

any obligations under the Master Lease, nor shall such default of the Master
Landlord affect Brillian's obligations hereunder; provided, that in the event of
any such default or failure of performance by Master Landlord, TFS agrees, upon
notice from Brillian, to make demand upon Master Landlord to perform its
obligations under the Master Lease and to otherwise cooperate reasonably with
Brillian as Brillian may reasonably request, in enforcing the remedies provided
in the Master Lease.

         8.       EVENTS OF DEFAULT. The occurrence of any one of the following
events shall constitute an event of default ("Event of Default") under this
Sublease:

                  (a)      Brillian fails to pay Base Sublease Rent, Building
Services Rent, MIS Services Rent, Variable Services Rent, or any other sum of
money when due under this Sublease within three (3) business days after receipt
by Brillian of written notice from TFS that such amount is due; provided,
however, that TFS shall not be required to give more than two written notices in
any twelve month period;

                  (b)      Brillian assigns this Sublease or sublets all or a
portion of the Sublet Premises, or attempts to do the aforementioned, in
violation of Paragraph 20 hereof;

                  (c)      Brillian fails to perform any of its other
obligations under this Sublease or the Master Lease and such failure continues
for ten (10) days after the receipt by Brillian of written notice of default
with respect to such failure. Notwithstanding the foregoing, Brillian shall not
be in default under this Sublease with respect to any non-monetary breach (other
than those listed in subparagraph b above) that may be cured by the performance
of affirmative acts if Brillian promptly commences the performance of said
affirmative acts and diligently prosecutes the same to completion as soon as
possible, and in any event, within not more than the time period prescribed for
TFS to cure such default under the Master Lease. Notwithstanding anything to the
contrary contained in the foregoing, if Brillian fails to maintain the insurance
required in Paragraph 17 hereof, TFS may, in addition to any other remedies
herein contained, immediately upon such failure (but TFS shall not be so
obligated), at Brillian's sole cost and expense, procure the insurance coverage
required herein, and if Brillian shall fail to reimburse TFS for the costs and
expenses it incurred in procuring such coverage, within fifteen (15) days of
notice from TFS, an Event of Default shall have occurred hereunder.

         9.       REMEDIES OF TFS. Upon the occurrence of an Event of Default,
TFS shall have all of the rights and remedies available under the Master Lease
and at law or in equity. All remedies shall be cumulative and non-exclusive.

         10.      ACCESS TO SUBLET PREMISES. Except in the event of an emergency
in which case no notice shall be required, TFS or Master Landlord or any of
their respective agents, contractors, or employees may enter the Sublet Premises
during normal business hours upon 24 hours advance notice (except in the event
of an emergency), to inspect the Sublet Premises, or during the last six (6)
months of the term of this Sublease to show said property to persons seeking to
rent or purchase the Sublet Premises, or to make repairs or improvements to the
Sublet Premises. This paragraph is not to be construed as obligating TFS to make
any repairs.

                                       5

<PAGE>

         11.      WAIVERS BY BRILLIAN; HOLDOVER.

                  (a)      Except for any notice expressly provided for in this
Sublease, Brillian waives to TFS the benefit of all laws now or hereafter in
force, in this state or elsewhere, requiring notice to vacate the Sublet
Premises at the end of the term or any extensions or renewals thereof. Brillian
covenants and agrees to give up quiet and peaceful possession without further
notice from TFS or its agent at the end of the term of this Sublease. Brillian
also waives to TFS the benefit of all laws now or hereafter in force, in this
state or elsewhere, exempting property from liability for rent, or for debt.

                  (b)      If Brillian shall not immediately surrender the
Sublet Premises on the day after the termination or expiration of the term of
this Sublease, then Brillian shall, by virtue of this Sublease, become a
sublessee at the sufferance of TFS at twice the immediately preceding Base
Sublease Rent agreed by Brillian to be paid as aforesaid, and Brillian shall be
subject to all of the other conditions and covenants of this Sublease.

         12.      LATE PAYMENT. If Brillian shall fail to pay when the same is
due and payable, Base Sublease Rent, Building Services Rent, MIS Services Rent,
Variable Services Rent, or any other sums due under this Sublease, interest
shall be charged on all unpaid amounts at the amount of the late charge provided
for in the Master Lease.

         13.      INDEMNITY. In addition to the indemnity provided for in the
Master Lease, Brillian shall indemnify and hold TFS and Master Landlord harmless
from and defend TFS and Master Landlord with counsel reasonably satisfactory to
TFS and Master Landlord against any and all claims, liabilities, losses,
damages, costs, and expenses, for any injury or damage to any person or property
whatsoever, occurring in, on, or about the Sublet Premises or other portions of
the Building or when such injury or damage shall be caused in part or in whole
by the neglect, fault, or omission of Brillian, its employees, invitees,
contractors, subcontractors, licensees, subtenants, or agents.

         TFS shall indemnify and hold Brillian harmless from and defend Brillian
with counsel reasonably satisfactory to Brillian against any and all claims,
liabilities, losses, damages, costs, and expenses caused by any representation
or warranty made by TFS in Paragraph 6 hereof being false or misleading, by any
default by TFS under the Master Lease, or by TFS's exercise of its cancellation
rights under the Second Amendment to Lease as it relates to the Sublet Premises.

         Notwithstanding the foregoing, in no event shall either party be liable
for consequential, indirect, or special damages to the other party.

         14.      MASTER LEASE DEFAULTS. TFS will not cause or knowingly allow
to be caused any default under the Master Lease which shall remain uncured at
the expiration of the applicable cure period set forth therein, unless such
default arises out of a failure by Brillian to perform its obligations under
this Sublease. TFS will deliver to Brillian a copy of any notice of default by
TFS under the Master Lease within five (5) days after receipt thereof by TFS. In
addition, in the event TFS is in default under the Master Lease and such default
continues beyond the expiration of the applicable grace period set forth therein
(a "Master Lease Continuing Default"), Brillian shall thereafter have the right
(but not the obligation) to cure such Master Lease Continuing Default, if
Brillian's cure of such Master Lease

                                       6

<PAGE>

Continuing Default is acceptable to Master Landlord and provided that Brillian
gives TFS prior written notice of such undertaking.

         15.      RESTORATION. Brillian shall immediately prior to the
expiration or sooner termination of this Sublease, surrender the Sublet Premises
in the condition required under the Master Lease and otherwise in broom clean
and good condition, normal wear and tear excepted. In the event of termination
of this Sublease in any manner whatsoever, Brillian shall forthwith remove
Brillian's goods and effects and those of any other persons claiming under
Brillian or subtenancies assigned to it, and quit and deliver the Sublet
Premises to TFS peaceably and quietly. Goods and effects not removed by Brillian
on or before the date of termination of this Sublease (or within forty-eight
(48) hours after a termination by reason of Brillian's default) shall be
considered abandoned. TFS shall give Brillian notice of right to reclaim
abandoned property pursuant to applicable local law and may thereafter dispose
of the same as it deems expedient, including storage in a public warehouse or
elsewhere at the cost and for the account of Brillian, but Brillian shall
promptly upon demand reimburse TFS for any expenses incurred by TFS in
connection therewith, which obligation shall survive the termination or
expiration of this Sublease.

         16.      NOTICES. All notices hereunder shall be in writing and will be
effective upon receipt if delivered personally, or by nationally recognized
overnight courier service to a party's address set forth below or to such other
address as either may give to the other in writing for such purpose:

                  TFS:         Three-Five Systems, Inc.
                               Attn:  General Counsel
                               1600 North Desert Drive
                               Tempe, Arizona 85281

                  Brillian:    Brillian Corporation
                               Attn: Chief Financial Officer
                               1600 North Desert Drive
                               Tempe, Arizona 85281

         17.      BRILLIAN'S INSURANCE.

                  (a)      Brillian shall, at its sole cost and expense,
maintain during the term hereof all insurance coverages required to be
maintained by the tenant under the Master Lease. In addition to the above,
Brillian shall also separately maintain a $1 million insurance policy to cover
catastrophic damage to the building that results from Brillian's use of the
leasehold premises. This policy will specifically name TFS as a beneficiary.
Copies of all policies or certificates evidencing said insurance shall be
delivered to TFS prior to the Commencement Date and renewals thereof shall be
delivered to TFS prior to the expiration of any such policy. If Brillian fails
to adhere to the requirements of this Paragraph 16, TFS, in addition to any
other remedies it may have, may obtain such insurance and charge the cost
thereof to Brillian, which amount shall be payable by Brillian upon demand.

                  (b)      All insurance required to be carried by Brillian
shall be issued in the coverages and amounts required under the Master Lease by
responsible insurance companies,

                                       7

<PAGE>

qualified to do business in the locality where the Sublet Premises are located
and reasonably acceptable to TFS and Master Landlord and shall provide (i) that
no change or cancellation of said policies shall be made without thirty (30)
days prior written notice to TFS and Brillian; (ii) that any coverage of TFS or
sum payable to TFS shall be unaffected by any act or omission of Brillian or any
other insured which might otherwise result in forfeiture of said insurance; and
(iii) that the insurance company issuing the same shall not have any right of
subrogation against TFS or TFS's insurer. Each policy and renewal shall name
TFS, any mortgagee and Master Landlord as an additional insured and, in the case
of casualty insurance for other than Brillian's personal property, shall name
TFS as loss payee. Copies of all policies or certificates evidencing the
existence and amounts of said insurance shall be delivered to TFS by Brillian
upon request. Each policy shall also contain provisions required by any
mortgagee of the Sublet Premises or any portion thereof.

                  (c)      Copies of all policies or certificates evidencing
said insurance shall be delivered to TFS prior to the Commencement Date and
renewals thereof shall be delivered to TFS prior to the expiration of any such
policy. If Brillian fails to adhere to the requirements of this Paragraph 17,
TFS, in addition to any other remedies it may have, may order such insurance and
charge the cost thereof to Brillian, which amount shall be payable by Brillian
upon demand.

                  (d)      Brillian hereby waives any and all rights of recovery
against TFS and its officers, employees, agents, and representatives for loss of
or damage to Brillian or its property or the property of others under its
control, arising from any cause insured or required to be insured against by
Brillian, irrespective of whether such loss or damage is caused by negligence of
TFS or any of its employees, invitees, contractors, subcontractors, licensees,
subtenants, or agents. Brillian shall obtain and furnish evidence to TFS of the
waiver by Brillian's insurance carriers of any right of subrogation against TFS.

         18.      ALTERATIONS.

                  (a)      Brillian shall not make any building or leasehold
alterations or additions, including remodeling or signage, without first
obtaining Master Landlord's and TFS's consent, which TFS's and Master Landlord's
consent may be withheld in their sole discretion. If any such alterations or
additions are made, Brillian agrees not to permit any mechanics' liens to be
placed on the Sublet Premises or any portion thereof and to cause any contract
for work to be done at the Sublet Premises to contain a waiver of the
contractor's right to file a mechanics' lien. Any alterations of any kind to the
Sublet Premises or any part thereof, except Brillian's trade fixtures which can
be removed without damage or defacement to the Sublet Premises or any other
portion of the Building, shall be surrendered with the Sublet Premises, as a
part thereof, at the end of the Sublease Term; provided, however, that TFS may
require at the time TFS and Master Landlord consent to such alteration or
fixture Brillian to remove any alterations or fixtures made by Brillian, and to
repair any damage to the Sublet Premises caused by such removal, all at
Brillian's sole expense. Any alterations installed by Brillian shall be deemed a
part of the Sublet Premises and shall be maintained and repaired by Brillian in
the same manner as that required for all other portions of the Sublet Premises.

                  (b)      Brillian shall have the right to place a sign or
signs on the facade of the Building, provided, however: (i) TFS (and the Master
Landlord to the extent that such consent from the Master Landlord is required
under the Master Lease) shall have the right to consent to the size,

                                       8

<PAGE>

style, and location of any such signs, which consent shall not be unreasonably
withheld or delayed; (ii) any such signs shall comply with all applicable laws,
rules, regulations, and covenants, conditions, and restrictions of record; and
(iii) TFS may require that Brillian remove any such signs at the expiration of
the Term and repair any damage to the Building caused by such removal, all at
Brillian's sole expense.

         19.      CONDEMNATION. All compensation awarded or paid upon a total or
partial taking of the Sublet Premises shall belong to and be the property of TFS
without any participation by Brillian; provided, however, that nothing contained
herein shall be construed to preclude Brillian from prosecuting any claim
directly against the condemning authority in such condemnation proceedings for
loss of business, and/or depreciation to, damage to, and/or cost of removal of,
and/or for the value of stock and/or trade fixtures, furniture, and other
personal property belonging to Brillian; provided, however, that no such claim
shall diminish or otherwise adversely affect TFS's and/or Master Landlord's
award or the award(s) of any and all ground and underlying lessor(s) and
mortgagee(s).

         20.      ASSIGNMENT.

                  (a)      Without the written consent of TFS, which consent may
be withheld in TFS's sole discretion, and the consent of Master Landlord,
Brillian shall not by operation of law or otherwise, assign or mortgage this
Sublease, or sublet or license the whole or any part of the Sublet Premises or
permit the Sublet Premises or any part thereof to be used or occupied by others.
Notwithstanding the foregoing, Brillian may, upon fifteen (15) days prior
written notice to TFS but without TFS's consent, assign or sublet all or any
portion of the Sublet Premises to (i) any entity controlled by or under common
control with Brillian, or (ii) any successor to Brillian by merger or
acquisition of all or substantially of Brillian's assets or the transferee of
more than fifty percent (50%) of Brillian's capital stock, provided that in each
case (i) the proposed assignee or Brillian has a net worth greater than or equal
to the greater of (a) Brillian's net worth on the date of this Sublease, or (b)
Brillian's net worth on the date of such assignment or sublease, and (ii)
Brillian obtains the prior written consent of the Master Landlord to such
assignment or subletting.

                  (b)      Regardless of TFS's consent, no subletting or
assignment shall release or alter Brillian's primary liability to pay Base
Sublease Rent, Building Services Rent, MIS Services Rent, Variable Services
Rent, and to perform all other obligations to be performed by Brillian
hereunder. Upon a default hereunder by any assignee or sublessee of Brillian,
TFS may proceed directly against Brillian without the necessity of exhausting
remedies against such assignee or sublessee. TFS may consent to any subsequent
assignment or subletting of this Sublease and such action shall not relieve
Brillian of liability under this Sublease.

                  (c)      Each permitted assignee or transferee shall assume
and be deemed to have assumed this Sublease and shall be and remain liable
jointly and severally with Brillian for the payment of the Base Sublease Rent,
Building Services Rent, MIS Services Rent, Variable Services Rent, and for the
due performance of all of the provisions, covenants, conditions, and agreements
herein contained on Brillian's part to be performed for the term of this
Sublease. No otherwise permitted assignment or transfer shall be binding on TFS
unless such assignee or transferee shall deliver to TFS a counterpart of such
assignment and an instrument in recordable form which contains a covenant of
assumption by the assignee or transferee, but the failure or refusal of the

                                       9

<PAGE>

assignee or transferee to execute such instrument of assumption shall not
release or discharge the assignee or transferee from its liability as set forth
above.

                  (d)      Any consent by TFS or Master Landlord to any act of
assignment or subletting shall be held to apply only to the specific assignment
or subletting thereby authorized. Such consent shall not be construed as a
waiver of the duty of Brillian, or the legal representatives or assigns of
Brillian, to obtain from TFS or Master Landlord consent to any other or
subsequent assignment or subletting, or as modifying or limiting the rights of
TFS or Master Landlord under the foregoing covenant by Brillian not to assign or
sublet without consent.

                  (e)      If this Sublease is assigned or transferred, or if
the Sublet Premises or any part thereof be underlet or occupied by any person
other than Brillian, or if an Event of Default has occurred hereunder, TFS may
collect rent from the successor occupant and apply the net amount collected by
it to the rent herein reserved. No such collection shall be deemed a waiver of
the prohibition against assignment, sublets, and other transfers, or the
acceptance of the successor occupant as tenant, or a release of Brillian from
the further performance of the covenants herein contained on the part of
Brillian.

                  (f)      TFS may freely assign this Sublease at any time
without consent or notice to Brillian provided that the assignee assumes all of
the liabilities and obligations of TFS under this Sublease.

         21.      NO BROKER. Brillian covenants, warrants, and represents that
there was no broker involved in consummating this Sublease, and that no
conversations or prior negotiations were had with any broker concerning the
renting of the Sublet Premises. Brillian and TFS agree to defend, indemnify, and
hold the other party harmless against any claims for brokerage commission
arising out of any conversations or negotiations had by the indemnifying party
with any broker.

         22.      LIABILITY OF TFS. TFS shall not be liable for any injury or
damage to any person or to any property at any time on the Sublet Premises from
any cause whatsoever that may at any time exist from the use or condition of
said Sublet Premises or Building, or from failure of water supply or electric
current or from steam, electricity, water, gas, or rain which leak or flow from
or into any part of the Sublet Premises, or from breakage, leakage, obstruction
or from difficulties to the pipes, lines, appliances, plumbing, or lighting
fixtures, awnings, or signs in or upon the Sublet Premises, or from any other
cause, during the term of this Sublease or any renewal or extension hereof
except to the extent solely caused by the gross negligence or intentional
misconduct of TFS or its agents.

         23.      EFFECT. This Sublease shall be binding upon the parties
hereto, their successors and permitted assigns, and may not be altered, amended,
terminated, or modified except by written instrument executed by each of the
parties hereto.

         24.      DAMAGE OR DESTRUCTION. If the Sublet Premises shall be
partially damaged by fire or other cause, repairs shall be in accordance with
the terms of the Master Lease which shall also determine to what extent, if any,
the rent shall be abated. If the Sublet Premises shall be totally destroyed by
fire or other cause at any time prior to the end of the term of this Sublease,
Brillian agrees to be bound by Master Landlord's decision made in accordance
with the

                                       10

<PAGE>

applicable terms of the Master Lease, if any, as to whether or not the Sublet
Premises is to be restored and whether or not the Master Lease shall remain in
effect. Brillian's obligation to pay rent under the Sublease shall be governed
by the terms of the Master Lease, if any, applicable to abatement of TFS's
rental under the Master Lease as it relates to the Sublet Premises.

         25.      NOTICE. Brillian shall notify TFS of any damage to the Sublet
Premises by fire or other casualty and also of any dangerous or defective
condition within the Sublet Premises immediately upon the occurrence of such
fire or other casualty or discovery of such condition. Except as affected by the
giving or failure to give such notice, nothing herein contained shall be deemed
to limit or enlarge the respective rights and liabilities of either party
arising from the negligent acts or conduct of the other.

         26.      RELATIONSHIP. It is understood, covenanted, and agreed between
the parties hereto that nothing in this Sublease shall constitute TFS an
employer, employee, principal, agent, or partner of Brillian and the
relationship hereby created between the parties hereto shall be strictly and
solely that of sublessor and sublessee.

         27.      WAIVERS. No waiver of any covenant or condition by TFS shall
be construed as a waiver of a subsequent breach of the same or any other
covenant or condition, and the consent or approval by TFS to or of any act by
Brillian requiring TFS's consent or approval shall not be construed to waive or
render unnecessary TFS's consent or approval to or of any subsequent similar act
by Brillian.

         28.      FORUM. This Sublease shall be governed by the laws of the
state of Arizona.

         29.      JOINT AND SEVERAL LIABILITY; AUTHORITY. If two or more
individuals, corporations, partnerships, or other business associations (or any
combination of two or more thereof) shall sign this Sublease as sublessor, the
liability of each such individual, corporation, partnership, or other business
association to pay rent and perform all other obligations hereunder shall be
deemed to be joint and several, and all notices, payments, and agreements given
or made by, with, or to any one of such individuals, corporations, partnerships,
or other business associations shall be deemed to have been given or made by,
with, or to all of them. In like manner, if sublessor shall be a partnership or
other business association, the members of which are, by virtue of statute or
federal law, subject to personal liability, the liability of each such member
shall be joint and several.

         30.      NO OPTION; CONSENT OF MASTER LANDLORD. This Sublease shall
become effective only upon execution and delivery thereof by both parties and
upon Master Landlord's written consent to the terms of this Sublease in
substantially the form of consent attached hereto as Exhibit G and made a part
hereof. TFS shall use best efforts to obtain Master Landlord's written consent;
provided that in no event shall TFS be obligated to commence any legal
proceeding to obtain or attempt to obtain Master Landlord's consent.

         31.      FORCE MAJEURE. Neither Brillian nor TFS shall be deemed in
default under this Sublease (excluding, however, monetary defaults) to the
extent that any such failure stems from a cause beyond the reasonable control of
the respective party, including, without limitation,

                                       11

<PAGE>

any act of God, war, insurrection, applicable governmental or judicial law or
regulation, zoning ordinance, labor strike, order, or decree.

         32.      WAIVER OF TRIAL BY JURY. IT IS MUTUALLY AGREED BY AND BETWEEN
TFS AND BRILLIAN THAT THE RESPECTIVE PARTIES HERETO SHALL AND DO HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER OF
THE PARTIES HERETO AGAINST THE OTHER (EXCEPT FOR PERSONAL INJURY OR PROPERTY
DAMAGE) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS SUBLEASE, THE RELATIONSHIP OF TFS AND BRILLIAN, AND BRILLIAN'S USE OR
OCCUPANCY OF SAID SUBLET PREMISES.

         33.      TFS'S PURCHASE OF BUILDING. Brillian expressly acknowledges
that TFS has the right pursuant to Sections 15 and 16 of the Master Lease to
purchase the Building. In the event TFS purchases the Building, which event
shall be evidenced by a written notice of such purchase from TFS to Brillian,
then in such event this Sublease shall be deemed a prime lease by and between
TFS, as owner of the Building, and Brillian, as tenant of the Sublet Premises.

         34.      GROUND SUBLEASE.

                  (a)      Brillian hereby expressly acknowledges that the
Sublease of the Sublet Premises is subject to the terms and conditions of the
Ground Sublease.

                  (b)      All the obligations of TFS contained in the Ground
Sublease as they relate to the Sublet Premises are hereby conferred and imposed
upon Brillian, except as expressly modified and amended by this Sublease.
Brillian covenants and agrees fully and faithfully to perform the terms and
conditions of the Ground Sublease as they relate to the Sublet Premises and this
Sublease on its part to be performed, including, but not limited to, all
maintenance and repair obligations and all compliance with law obligations.
Brillian shall not do or cause to be done or suffer or permit any act to be done
that would or might cause the Ground Sublease, or the rights of TFS as tenant
under the Ground Sublease, to be endangered, canceled, terminated, forfeited, or
surrendered, or that would or might cause TFS to be in default thereunder or
liable for any damage, claim, or penalty. Brillian agrees, as an express
inducement for TFS's executing this Sublease, that if there is any conflict
between the provisions of this Sublease and the provisions of the Ground
Sublease that would permit Brillian to do or cause to be done or suffer or
permit any act or thing to be done that is prohibited by the Ground Sublease,
then the provisions of the Ground Sublease shall prevail. All rights, remedies,
and indemnifications given to the Ground Lessor in the Ground Sublease are
hereby given to TFS under this Sublease.

                  (c)      If any event occurs that would permit TFS to
terminate the Ground Sublease as it relates to the Sublet Premises, Brillian
shall notify TFS of such occurrence and of its recommendations immediately with
regard to such termination rights. TFS shall decide in its reasonable discretion
whether or not to terminate the Ground Sublease and shall give Brillian written
notice of such decision. If TFS elects to terminate the Ground Sublease as it
relates to the Sublet Premises, this Sublease shall terminate on the earlier of
the date of termination of the Ground Sublease or the date which is (30) days
after Brillian's receipt of such written notice from TFS. In the event that TFS
elects to terminate the Ground Sublease prior to providing notice to the

                                       12

<PAGE>

Ground Lessor, TFS must provide prior written notice to Brillian of its intent
to terminate this Sublease, and within five (5) days after the receipt of such
notice from TFS, Brillian may notify TFS in writing that it intends to continue
possession of the Sublet Premises under the terms and conditions of this
Sublease, in which case, TFS shall not exercise its right of termination under
the Ground Sublease as it relates to the Sublet Premises.

                  (d)      TFS shall have no duty to perform any obligations of
or provide any services to be provided by the Ground Lessor and shall under no
circumstances be responsible or liable to Brillian for any default, failure, or
delay on the part of the Ground Lessor in the performance of any obligations
under the Ground Sublease, nor shall such default of the Ground Lessor affect
Brillian's obligations hereunder; provided, that in the event of any such
default or failure of performance by Ground Lessor, TFS agrees, upon notice from
Brillian, to make demand upon Ground Lessor to perform its obligations under the
Ground Sublease and to otherwise cooperate reasonably with Brillian as Brillian
may reasonably request, in enforcing the remedies provided in the Ground
Sublease.

                  (e)      TFS will not cause or knowingly allow to be caused
any default under the Ground Sublease which shall remain uncured at the
expiration of the applicable cure period set forth therein, unless such default
arises out of a failure by Brillian to perform its obligations under this
Sublease. TFS will deliver to Brillian a copy of any notice of default by TFS
under the Ground Sublease within five (5) days after receipt thereof by TFS. In
addition, in the event TFS is in default under the Ground Sublease and such
default continues beyond the expiration of the applicable grace period set forth
therein (a "Ground Sublease Continuing Default"), Brillian shall thereafter have
the right (but not the obligation) to cure such Ground Sublease Continuing
Default, if Brillian's cure of such Ground Sublease Continuing Default is
acceptable to Ground Lessor and provided that Brillian gives TFS prior written
notice of such undertaking.

                  (f)      TFS shall use its best efforts to obtain Ground
Lessor's written consent to this Sublease substantially in the form of Exhibit H
attached hereto in order that Brillian have the protections of Article 16 of the
Ground Sublease as a "Permitted Sublease" (as such term is defined in Section
17.2 of the Ground Sublease); provided, that in no event shall TFS be obligated
to commence any legal proceeding to obtain or attempt to obtain Ground Lessor's
consent. Furthermore, Brillian expressly acknowledges that TFS has the right
pursuant to Section 3.3 of the Ground Sublease to purchase the Land, in which
event the Master Ground Lease (as such term is defined in the Ground Sublease)
shall be amended to delete the Land as of the closing of such purchase, as more
fully set forth in Section 3.3(B)(3) of the Ground Sublease. In the event TFS
purchases the Land, which event shall be evidenced by a written notice of such
purchase from TFS to Brillian, then in such event this Sublease shall be deemed
a prime lease by and between TFS, as owner of the Land, and Brillian, as tenant
of the Sublet Premises.

         35.      EXHIBITS. Each of the exhibits attached hereto are made a part
hereof. The following is a list of exhibits attached to this Lease:

                                       13

<PAGE>

                  Exhibit A         -       Copy of Master Lease
                  Exhibit B         -       Copy of Ground Sublease
                  Exhibit C         -       Sublet Premises and Common Areas
                  Exhibit D         -       Building Services
                  Exhibit E         -       MIS Services
                  Exhibit F         -       Variable Services
                  Exhibit G         -       Form of Master Landlord's Consent
                  Exhibit H         -       Form of Ground Lessor's Consent

                            [Signature Page Follows]

                                       14

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Sublease as of the
day and year first above written.

TFS:                                       BRILLIAN:

THREE-FIVE SYSTEMS, INC., a Delaware       BRILLIAN CORPORATION, a Delaware
corporation                                corporation

By:     /s/ Jeffrey D. Buchanan            By:     /s/ Wayne A. Pratt
   ---------------------------------          ----------------------------------
Name:   Jeffrey D. Buchanan                Name:   Wayne A. Pratt
Title:  Executive Vice President and       Title:  Vice President and Chief
        Chief Financial Officer                    Financial Officer

                                       15

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