Before the Court is Plaintiff's Ex Parte Motion for an Order to Freeze Assets
("Asset Freeze Motion") (#604), filed April 5, 2007. The Court has also considered Plaintiff's
sealed supplements to the Asset Freeze Motion (#671 & #677), filed July 20, 2007, and July 27,
2007.

This matter, having come before the Court on Koninklijke Philips Electronics
N.V.'s ("Philips") Asset Freeze Motion against KXD Technology, Inc. ("KXD Technology"),
Astar Electronics, Inc. ("Astar"), Shenzhen KXD Multimedia Co., Ltd., Shenzhen Kaixinda
Electronics Co., Ltd., KXD Digital Entertainment, Ltd., Jingyi Luo, a/k/a James Luo and Astar
Electronics USA, Inc. (collectively, "KXD Defendants") and the Court having reviewed and
considered all papers submitted in support of Plaintiff's Asset Freeze Motion, such as the relevant
pleadings, evidence presented in this matter, and arguments of counsel, the Court now makes the
following ruling:

FINDINGS OF FACT

1. 1.   On February 28, 2007, at the hearing on the KXD Defendants' emergency
   application to stay the Court's contempt order ("Emergency Stay Hearing"), the Court found that
   the KXD Defendants have a history of avoiding this Court's orders and moving assets out of
   California.
2. 2.   The Court found that: "[T]here have been efforts, which were only avoided by a
   seizure order, to hurriedly, secretly remove assets from California so that they would not be
   accessible." (Dkt. #579, Emerg. Stay Hr'g 9:19-25; 10:1-17.)
3. 3.   The Court has found that the KXD Defendants have a track record in not
   complying with the Court's Orders. (Id. at 22:15-25.)
4. 4.   The Court has already recognized that the KXD Defendants "quite frankly, have
   not shown that they are going to make it easy for anyone to collect" anything, or whether the assets
   are truly available. (Id. at 10:14-17.)

1. 5.   The KXD Defendants have failed and refused to comply with the Court's
   temporary restraining order ("TRO") (Dkt. #39), preliminary injunction ("PI") (Dkt. #252) and
   civil contempt order ("Civil Contempt Order I") (Dkt. #558).
2. 6.   The TRO and PI enjoined and restrained the KXD Defendants from, among
   other things, "manufacturing, importing, exporting, distributing, shipping, introducing into
   commerce, offering for sale, selling, returning, disposing of, packaging, re-packing, marketing,
   advertising, or supplying any goods that bear, embody, display, or affix the DVD+ReWritable &
   Design mark" (the "Counterfeit Products").
3. 7.   Despite the Court's issuance of the PI on March 14, 2006, the KXD Defendants
   have failed to submit a sufficient compliance report "in writing and under oath setting forth in
   detail the manner and form in which compliance with [the PI] was made."(Dkt. #252, Prelim. Inj.
   6.)
4. 8.   On February 23, 2007, the KXD Defendants filed an Emergency Ex Parte
   Application for Stay of Order Imposing Sanctions for Civil Contempt ("Emergency Application
   for Stay"). (Dkt. #562.)
5. 9.   Despite this Court's denial of the Emergency Application for Stay and finding
   that the order was not appealable, the KXD Defendants applied to the Ninth Circuit for a stay.
6. 10.   The Ninth Circuit also denied the KXD Defendants' request for a stay. (Dkt.
   #618, Hedrick Dec. Ex. A.)
7. 11.   The KXD Defendants have refused to pay the sanctions ordered in Civil
   Contempt Order I despite continual assertions in papers filed with the Court, and at hearings, that
   KXD Defendants are more than capable of paying the ordered amounts. (Transcript of Contempt
   Sanction Hearing, Dkt. #544, p. 37); (see also Mot. for Stay, Dkt. # 562, 5) (counsel for KXD
   Defendants stated: "The KXD Defendants . . . are more than capable of satisfying the sanctions
   award.")

1. 12.   There is evidence that the KXD Defendants are liquidating and encumbering
   their assets. (Dkt. #671 & #677.)
2. 13.   Mr. Luo has made false statements to this Court. Mr. Luo falsely assured the
   Court that he, Astar, and KXD Technology were complying with the TRO, when in fact, Mr. Luo
   was informed of, expressly authorized, or ratified business transactions in violation of the TRO.
   (See Dkt. #424, Mot. for Civil Contempt Sanctions 13; see also Dkt. #426 & #427, Nezik Decl.,¶¶
   19-50, Exhs. 17-48.)
3. 14.   The KXD Defendants have represented to this Court under penalty of perjury
   that they have a net worth of $50,000,000.00. (Dkt. #562, Liu Decl. ¶ 5.)
4. 15.   The KXD Defendants have declared that they have inventory in the United
   States valued at more than $10,000,000.00 that demonstrates the ability to pay "any ultimate
   judgment." (Id. at ¶ 6.)
5. 16.   Despite these resources and the additional thirty days granted by the Court to
   pay the monetary sanctions, the KXD Defendants have failed to pay Philips any of the damages,
   costs and attorneys' fees of $1,674,799.84, failed to file a certification with the court of
   proof of payment, failed to pay any of the $10,000.00 per diem sanctions and failed to post the
   $2,000,000.00 bond.

CONCLUSIONS OF LAW

1. 17.   This Court has already expressed its distrust of the KXD Defendants, based
   upon the KXD Defendants' track record of secretly moving and attempting to move assets out of
   reach. (Dkt. #579, Emerg. Stay Hr'g 9:19-25; 10:1-17.)
2. 18.   Philips has sufficiently established why it filed this motion ex parte without
   notice as the KXD Defendants are likely to conceal, transfer or otherwise hide their assets if they
   are notified of Philips' request that this Court freeze the KXD Defendants' assets.

1. 19. In determining whether to grant a preliminary injunction that freezes assets to
   protect a potential recovery, this Circuit applies the standard test that is used to evaluate claims for
   preliminary injunctive relief. FTC v. Evans Product Co., 775 F.2d 1084, 1088 (9th Cir. 1985).
2. 20. Under the first part of the test, the movant must show 1) irreparable injury, 2)
   probable success on the merits, 3) that the balance of hardships tips in the movant's favor, and 4)
   that a preliminary injunction freezing assets is in the public interest. Id. "Alternatively, a court
   may issue an injunction if the moving party demonstrates either a combination of probable success
   on the merits and irreparable injury or that serious questions are raised and the balance of
   hardships tips in his favor." Id. at 1088-89.
3. 21. The purpose of a temporary restraining order is to preserve the status quo and
   prevent irreparable harm just so long as is necessary to hold a hearing, and no longer. Granny
   Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423, 439 (1974).
4. 22. Federal Rule of Civil Procedure 65(b) allows a court to issue a temporary
   restraining order without written or oral notice to the adverse party if it is clear from affidavit or
   verified complaint that immediate and irreparable injury, loss, or damage will result, and adequate
   reasons are given supporting the claim that notice should not be required.
5. 23. The Ninth Circuit has recognized that an order freezing a defendant's assets is
   appropriate to preserve the status quo so that assets can be preserved to satisfy an equitable decree.
   Reebok Intern. Ltd. v. Marnatech Enters., Inc., 970 F.2d 552, 558-561 (9th Cir. 1992).
6. 24. Fed. R. Civ. P. 64 permits seizures of property as authorized by federal law,
   including by way of "attachment . . . and other corresponding or equivalent remedies."

      Irreparable Injury

1. 25. The Court found in its Civil Contempt Order I that the KXD Defendants did
   not comply with the Court's PI and TRO and continued to actively violate both orders. Thus, the
   record establishes that the KXD Defendants were in contempt of the Court's PI and TRO. (Civil
   Contempt Order I, 4.)

1. 26. The KXD Defendants are also in contempt of the Civil Contempt Order I.
   They have not complied with Civil Contempt Order I, despite the Court's leniency as to the
   amount of monetary sanctions and the timing of the payments. (Dkt. #579, Emerg. Stay Hr'g.)
2. 27. As established by the KXD Defendants' behavior, in willfully disobeying the
   TRO, the PI, and the Civil Contempt Order I (including the previous behavior of the KXD
   Defendants' counsel, attempting to aid in the concealment of Counterfeit Products by shipping
   assets to China despite the Court's seizure orders), the KXD Defendants are likely to dissipate
   their bank accounts and liquidate or hide their other assets unless the Court intervenes and
   removes this option by freezing their assets. The KXD Defendants have yet to make any payment
   as ordered by the Civil Contempt Order I.
3. 28. Plaintiff also brings to the Court's attention that since the issuance of the Civil
   Contempt Order I, the KXD Defendants have encumbered their resources within the United States
   with liens from Chinese banks; and Defendant James Luo is liquidating his property and
   transferring title to his wife. (Dkt. #671 & #677) (supplementing the Asset Freeze Motion). Thus,
   the Court finds that absent this Order to freeze assets, it is likely that the KXD Defendants will
   make the injury to Plaintiff irreparable.

Probable Success on the Merits

1. 29. The Court has already found previously that there is a probability of success on
   the merits in issuing the previous preliminary injunction (Dkt. #252, Prelim. Inj. 3-4.)

The Balance of Hardships Favors the Issuance of the Asset Freeze Order

1. 30. If the Court does not issue an asset freeze order, Philips would be irreparably
   harmed because the assets in the KXD Defendants' bank accounts and other assets would likely be
   secreted away and dissipated. Given the KXD Defendants track record, they are likely to conceal,
   transfer or otherwise hide their assets. Under these circumstances, an order limiting the KXD
   Defendants' access to their assets is the only means that this Court has of ensuring that Philips will
   be able to recover any of the damages that this Court awarded in its Civil Contempt Order I, or that

are likely to be found with a successful trial on the merits. The threat of irreparable injury to
Philips causes the "balance of hardships" to tip decidedly in favor of Philips.

A Preliminary Injunction is in the Public's Interest

1. 31.   It is in the public's interest to protect trademarks so that consumers are not
   deceived into buying a product that is not what it purports to be. Issuing an injunction here will
   promote the protection of Philips' trademark. Therefore, the Court finds that the Public interest
   favors a injunction.

Reasons that Notice Should Not Be Required

1. 32.   Plaintiff has submitted adequate reasons and evidence to show that the KXD
   Defendants will likely liquidate and hide their assets if notice were given on this Motion.
   Furthermore, the KXD Defendants have already shown their desire to avoid seizures by shipping
   assets out of the country. Therefore, the Court finds that preliminary notice is not required.

KXD Defendants' Assets Can Be Impounded until they have Complied with the Orders of
this Court

1. 33.   The KXD Defendants have claimed that they have inventory worth
   $10,000,000.00 located in their warehouse in Baldwin Park, California, which could be used as
   "security for their performance" on Civil Contempt Order I. (Dkt. #562, Liu Decl. ¶ 6.) In order to
   prevent the KXD Defendants from liquidating their inventory without first complying with the
   Court's orders and tendering payment to Philips, the Court has the authority to impound the
   inventory until the KXD Defendants comply with the Civil Contempt Order I and any further
   orders issued by the Court.

Philips Has Already Provided Security

1. 34.   Fed. R. Civ. P. 65(c) requires that security be posted in an amount to be
   determined by this Court. Philips has already posted security in this action in the amount of
   $50,000.00. Therefore, the Court will only require a nominal bond of $1,000 to be posted for this
   injunction.

CONCLUSION

Accordingly, and for good cause appearing,

IT IS HEREBY ORDERED that Plaintiff's Motion for an Order to Freeze Assets
(#604) is GRANTED as follows:

(1) The KXD Defendants and their officers, directors, affiliates, agents, employees
and attorneys, their successors and assigns and all persons in active concert or participation with
any of the KXD Defendants, and all banks, financial institutions, brokerages, or others in
possession or control of their assets are hereby enjoined from directly or indirectly transferring,
concealing, secreting, distributing, disposing of, transferring (except to Philips as set forth herein),
shipping in any way or otherwise hiding assets and making unavailable to Philips or their officers,
agents, employees and attorneys any funds in the KXD Defendants' possession, control or in the
possession or control of others on behalf of the KXD Defendants including, but not limited to:

1. (a) KXD Technology, Inc.'s bank account (authorized agent, Jingyi Luo, aka
   James Luo), account numbers 080312408, 80312424, and 0080312309, located at East West Bank,
   2601 N. Broadway Los Angeles, CA 90031;
2. (b) Astar Electronics, Inc. and KXD Technology, Inc.'s bank account, account
   numbers 765-029699 and 765255773, located at Bank of the West at the South Pasadena
   Office #765 and 1833 N. Atlantic Blvd., #765;
3. (c) Jingyi Luo aka James Luo's bank account at Downey Savings Bank,
   17120 Colima Road, Hacienda Heights, CA 91745;
4. (d) any other bank or other financial accounts under the names KXD
   Technology, Inc., Astar Electronics, Inc., Shenzhen KXD Multimedia Co., Ltd., Shenzhen
   Kaixinda Electronics Co., Ltd., KXD Digital Entertainment, Ltd., Astar Electronics USA, Inc.,
   Jingyi Luo, aka James Luo, including variations of the forgoing names and alias;

(2) The known and unknown accounts, including additional accounts at the above
listed banks are to be frozen up to $5,000,000.00, except that the KXD Defendants may pay

ordinary and necessary business expenses, and Jingyi Luo may pay ordinary and necessary
personal expenses, with respect to the foregoing accounts of KXD Technology, Inc., Astar
Electronics, Inc., Jingyi Luo aka Jimmy Luo. Ordinary expenses referred to herein may be paid as
follows:

1. (a) rent or mortgage in the amount normally paid as required in any lease or
   loan on any premises, upon presentation of said lease or loan document to Philips and verification
   thereof;
2. (b) ordinary and regular salaries to any bonafide employees, other than any
   of the KXD Defendants themselves, or any relatives or dependents thereof, to the extent that such
   salaries are not excessive; provided, however, that such salaries shall be paid to persons on the
   payroll of the KXD Defendants as of January 1, 2007, and such salaries do not exceed the prior
   month's level and further provided that the KXD Defendants shall first present to Philips' counsel
   written documentation identifying and verifying all individuals proposed to be paid and the particulars
   of the salaries proposed therefor;
3. (c) ordinary and necessary bills for utilities, after such bills have been
   verified by Philips;
4. (d) payments of any amounts less than Two Thousand Dollars ($2,000), not
   to exceed an aggregate of more than Five Thousand Dollars ($5,000) per month, for ordinary
   business expenses (or ordinary personal expenses for Jingyi Luo aka James Luo), which transfers
   shall be documented and such documentation shall be provided to Philips' counsel within ten (10)
   calendar days following the end of each month; in the event that the documentation is not provided
   to Philips' counsel within ten (10) calendar days, no ordinary expenses will be allowed until the
   documentation of the previous month is provided to Philips' counsel;

(3) Jingyi Luo, aka James Luo shall be enjoined from selling or otherwise
encumbering his personal residence located at 16178 Wedgeworth Drive, Hacienda Heights, CA
91745, until the amount of $2,000,000.00 is paid to Philips;

(4) Jingyi Luo, aka James Luo shall be enjoined from selling or otherwise
encumbering his personal residence located at 18319 art Street, Unit 17, Reseda, CA 91335, until
the amount of $2,000,000.00 is paid to Philips;

(5) Jingyi Luo, aka James Luo shall be enjoined from selling or otherwise
encumbering his personal residence located at 7001 Etiwanda Avenue, Reseda, CA 91335, until
the amount of $2,000,000.00 is paid to Philips;

(6) In accordance with Fed. R. Civ. P. 64 and 65 that KXD Defendants, and their
agents, servants, employees, and any other person in active concert or participation with them, and
any person who has benefitted, directly or indirectly from the profits of the KXD Defendants, or
such companies, and any banks, savings and loan associations, or other financial institutions, or
agencies which engage in the transfer of real property, who receive actual notice of this Order by
personal service or otherwise, are temporarily restrained and enjoined from transferring (except to
Philips as set forth herein), disposing of, distributing, or secreting any money, stocks, or other
assets without prior approval of the Court;

(7) The KXD Defendants shall serve upon Philips' attorneys within thirty (30)
calendar days after service of the Order on the KXD Defendants, copies of all accountant's reports,
bank statements, certificates of deposit, notes, bonds, checking accounts, money market accounts,
savings accounts or other financial institution records showing investments or deposits, and
documents indicating title to any real or personal property, in the KXD Defendants' actual or
constructive possession or control, in whole or in part, or in which they otherwise have an interest,
whether domestic or foreign;

(8) The Court orders an assignment to Philips of the KXD Defendants' right to
payment from third party debtors of the KXD Defendants until the Civil Contempt Order I is
satisfied;

(9) The KXD Defendants' inventory located at 5101 Commerce Dr., Baldwin Park,
CA 91706 and any other location where such inventory is located is impounded until the KXD
Defendants have complied with the TRO, PI, and Civil Contempt Order I;

1. (a) To effect this impoundment, any United States Marshal, federal law
   enforcement officer, state police, local police, local sheriffs or deputy sheriffs, off-duty officers of
   the same and persons acting under their supervision (collectively, "Authorized Officers") are
   hereby authorized to impound the inventory located at the KXD Defendants' warehouse located at
   5101 Commerce Dr., Baldwin Park, CA 91706 and any other location where such inventory is
   located during regular business hours after the date of this Order;
2. (b) Representatives of Philips may accompany the U.S. Marshal or law
   enforcement officer to the impoundment;
3. (c) The impoundment ordered herein may be photographed and videotaped
   by Philips' attorneys and representatives for the purpose of authenticating and assisting in the
   obtaining of evidence and to prevent any controversy regarding the activities and events occurring
   during said impoundment;
4. (d) The Authorized Officers are authorized and shall employ whatever
   reasonable force is necessary to effect, carry out, and execute this Order. Philips shall hold the
   Authorized Officers harmless for any liability related to or that may be imposed upon execution of
   this Order;
5. (e) Anyone interfering with the execution of the impoundment is subject to
   arrest by the Authorized Officer or other law enforcement personnel; and
6. (f) Plaintiff or Plaintiff's designee shall maintain custody of the inventory
   impounded pending further Order of the Court.

IT IS FURTHER ORDERED that the KXD Defendants repatriate all funds
transferred overseas, individually or jointly, since January 5, 2006; to deposit those funds into a

bank within the Central District of California; and to disburse those funds only after giving notice
to Philips and obtaining Court approval.

IT IS FURTHER ORDERED, that Philips, by registration of this Court's Civil
Contempt Order I in other federal judicial districts, shall be authorized to levy by writ of
execution, in those out-of-state federal judicial districts, against the KXD Defendants' assets
including but not limited to such assets listed above. The Clerk of Court shall issue certified
copies of this Court's Contempt Order (Dkt. #541) and the Nunc Pro Tunc Correction of Order
#541 (Dkt. #558) for the purposes of out-of-state registration.

THE COURT HEREBY sets a hearing for Plaintiffs' Motion on August 20, 2007,
at 1:30 p.m. to be held in Courtroom 6C at the Lloyd D. George Federal Courthouse, 333 South
Las Vegas Boulevard, Las Vegas, NV. The Court's Order shall remain in force until that time.
KXD Defendants may appear at the hearing and show cause why this Order should not become
permanent for the duration of this case. Failure to appear at the hearing will constitute consent to
making the Order permanent for the duration of the case.