**Exhibit 10.69**

**EXECUTION VERSION**

**EXCLUSIVE LICENSE AGREEMENT**

This EXCLUSIVE LICENSE AGREEMENT (this **“Agreement”**) is made and entered into as of August 8, 2006(the **“Agreement Date”**), by andbetween DTS, Inc., a Delaware corporation (**“DTS”**),and Avica Technology Corporation, a California corporation (**“Avica”**).

**1****             ****DEFINITIONS**

All defined or abbreviated terms in this Agreementhave the meaning assigned to them in this Agreement and will apply both totheir singular and plural forms, as applicable. **“H/herein,” “hereof” and “hereunder”**orsimilar expressions refer to this Agreement. All references to **“Section”**refer to sections in this Agreement, and all references to **“Exhibit”** are to Exhibits A, B, and Cattached and incorporated hereto.  Exceptwhere expressly identified, all references to **“days”**are to calendar days.  DTS and Avica areindividually sometimes referred to in this Agreement as a **“party”** and collectively as the **“parties.”**

**1.1****         ****“Affiliate”**means, with respectto any person, any person that, directly or indirectly, through one or moreintermediaries, controls, is controlled by, or is under common control with,such person.

**1.2****         ****“Avica Products”**means all ofAvica’s product lines in existence, and any other products or technologiesunder development by or on behalf of Avica, as of the Closing Date, including ***.

**1.3****         ****“business day”**(whether such termis capitalized or not) means any day other than Saturday, Sunday or a legalholiday that banks located in Los Angeles, California are closed for business.

**1.4****         ****“Confidential Information”**means with respect to a party hereto (the **“Disclosing Party”**), collectively:  (i) all technical, financial and/or businessinformation of any kind whatsoever, including all data, compilations,blueprints, plans, audio and/or video recordings and/or devices, information oncomputer disks, software, source code, object code, tapes, printouts and otherprinted, typewritten or handwritten documents, specifications, systems,schemas, methods (including delivery, storage, receipt, transmission,presentation and manufacture of audio, video, informational or other data orcontent), strategies, business or marketing development plans, customer lists,research projections, processes, techniques, designs, sequences, components,programs, technology, ideas, know-how, improvements, inventions (whether or notpatentable or copyrightable), information about operations and maintenance,trade secrets, formulae, models, patent disclosures, information regarding theskills and compensation of the Disclosing Party’s employees, informationconcerning the actual or anticipated business, research or development of theDisclosing Party or its actual or potential customers or partners, informationwhich is or has been generated or received in confidence by or for theDisclosing Party by or from any person; (ii) any and all tangible andintangible embodiments thereof of any kind whatsoever including allcompositions, machinery, apparatus, records, reports, drawings, copyrightapplications, patent applications, documents, samples, prototypes, models,products and the like; and (iii) any extensions or derivatives thereof of anykind whatsoever.** **Notwithstanding the foregoing,Confidential Information does not include information that the Recipientproves:  (a) is or becomes generallyknown to the public through no fault or breach of this Agreement by theRecipient; (b) is known to the Recipient at the time of disclosure without anobligation of confidentiality; (c) is entirely independently developed by the

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Recipient without any access or reference to or use of the DisclosingParty’s Confidential Information; (d) the Recipient rightfully obtains from athird party without restriction on use or disclosure; or (e) isdisclosed publicly with the prior written approval of the DisclosingParty.  Information shall not be deemedto be in the public domain solely as a result of the individual elements beingseparately found in the public domain.

**1.5****         *****

**1.6****         ****“Derivative Work”**means a work that is based on or derived fromthe Licensed Products or Documentation, including any improvements,developments, alterations, derivatives, updates, revisions, enhancements,modifications, translations, abridgments, condensations, expansions or anyother form in which a Licensed Product or the Documentation may be recast,transformed or adapted.  For purposes ofthis Agreement, a **“Derivative Work”**also includes any compilation that incorporates a Licensed Product or theDocumentation.

**1.7****         ****“Documentation”** means all documentation relating to theLicensed Products provided by Avica to DTS.

**1.8****         ****“Encumbrance”** means any mortgage,pledge, security interest, lien, option, charge, claim, covenant, condition,restriction, encumbrance or any third-party claim of any kind or naturewhatsoever.

**1.9****         ****“Engineering Tools”**means all productand sub-system architectural designs, electrical schematics, printed circuitboard designs, mechanical design drawings, fabrication drawings, binary imagesand source files for all programmable parts, software tools, including thosefor compiling programmable part source files, test jigs (including electrical,mechanical and software design files used to create the test jigs), testprocedures, test software (including source files, build scripts, tools forbuilding the test software), product software in the form of disk image files,Source Code, build scripts, all software tools invoked by the build scripts,Source Code and build scripts for any software or hardware tools that weredeveloped by or on behalf of Avica that directly or indirectly relate to theAvica Products.

**1.10****       ****“Errors”** means any reproducible error, omission ordefect in a Licensed Product that creates a material adverse affect to theLicensed Product and/or the ability to use the Licensed Product as intended.

**1.11****       ****“Field”**means any fields of use other than militaryapplications.

**1.12****       ****“GAAP”**means United Statesgenerally accepted accounting principles consistently applied.

**1.13****       ****“Intellectual PropertyRights”** or **“IP”** meansany and all patents (and reissues, divisionals, continuations, continuations-inpart, and extensions thereof), patent rights (including patent applications,renewals and disclosures), business processes, manufacturing or developmentplans, trademarks, trade names, service marks, service names, goodwill, tradesecrets, know-how, designs, mask works, copyrights, moral rights, databaserights, and any other form of proprietary protection, or any applications forthe foregoing, which arise or are enforceable under the laws of the U.S. or anyother jurisdiction or any bi-lateral or multi-lateral treaty regime.

**1.14****       ****“Licensed IP”**means the Owned IPand Third Party IP.

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**1.15****       ****“Licensed Products”**means one or moreproducts, the development, improvement, manufacture, license, sale or any otheruse of which by DTS or its sublicensees, or the intended use of whichincorporate or use Licensed IP or which are covered in whole or in part by avalid claim under the patents and patent applications included in the LicensedIP.  For purposes of this Agreement, **“Licensed Products”** includes the AvicaProducts and the Engineering Tools, including any or all portions or componentsthereof.

**1.16****       ****“Licensed Services”**means thedevelopment or performance of one or more services by DTS or a sublicensee foror on behalf of DTS or a third party, which development or performanceincorporates or uses Licensed IP or which is covered in whole or in part by avalid claim under the patents and patent applications included in the LicensedIP.

**1.17****       ****“Object Code”**means software assembled or compiled inmagnetic or electronic binary form on software media, which are readable andusable by machines, but not generally readable by humans without reverseassembly, reverse compiling or reverse engineering.

**1.18****       ****“Operative”** means substantially conforming to theSpecifications and otherwise performing substantially in accordance with theapplicable performance standards and functioning without Errors.

**1.19****       ****“Option Agreement”**means that certainOption Agreement, entered into by the parties as of the date hereof.

**1.20****       ****“Owned IP”** means allIntellectual Property Rights owned by Avica, as set forth on Exhibit A.

**1.21****       ****“Publicly AvailableSoftware”** means each of (a)any software that contains, or is derived in any manner (in whole or in part)from, any software that is distributed as open source software (e.g., Linux) orthrough similar licensing or distribution models; and (b) any software thatrequires as a condition of use, modification and/or distribution of suchsoftware that such software or other software incorporated into, derived fromor distributed with such software (i) be disclosed or distributed in sourcecode form; (ii) be licensed for the purpose of making derivative works; or (iii) beredistributable at no charge.  PubliclyAvailable Software includes software licensed or distributed under any of thefollowing licenses or distribution models, or licenses or distribution modelssimilar to any of the following, including: (A) GNU’s General Public License(GPL) or Lesser/Library GPL (LGPL), (B) The Artistic License (e.g., PERL), (C)the Mozilla Public License, (D) the Netscape Public License, (E) the SunCommunity Source License (SCSL), (F) the Sun Industry Source License (SISL),and (G) the Apache Server license.

**1.22****       ****“Related Agreements”**means the Option Agreement, the Voting Agreement, the Escrow Agreement and allother agreements entered into in connection therewith.

**1.23****       ****“Source Code”** means software written in programminglanguages, including all comments and procedural code, such as job controllanguage statements, in a form intelligible to trained programmers and capableof being translated into Object Code for operation on computer equipmentthrough assembly or compiling, and, to the extent available, accompanied bydocumentation, including flow charts, schematics, statements of principles ofoperations, and architecture standards, describing the data flows, datastructures, and control logic of the software in sufficient detail to enable atrained programmer through study of such documentation to maintain and/ormodify the software without undue experimentation.

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**1.24****       ****“Specifications”** means the descriptions, functionalityrequirements, features, performance criteria, attributes, technicalcharacteristics and components of the Licensed Products.

**1.25****       ****“Avica Stockholders”**means the holdersof the shares of Avica’s Common Stock.

**1.26****       ****“Thirty Party IP”** means allIntellectual Property Rights licensed to Avica or any of its subsidiaries by athird party pursuant to a Third Party License or Third Party Licenses that arecurrently used in the conduct of Avica’s business (as conducted or as suchbusiness is presently contemplated to be conducted) or are relevant to theField, as set forth on Exhibit A. For purposes of this Agreement, **“ThirdParty IP”** includes the Publicly Available Software identified on ExhibitA.

**1.27****       ****“Third Party License(s)”**means all writtenor verbal contracts, licenses and agreements to which Avica or any of itssubsidiaries is a party and pursuant to which a third party has licensed ortransferred any Third Party IP to Avica or any of its subsidiaries as of theAgreement Date (excluding commercial off-the-shelf or shrink wrap licenses ofcomputer software), as set forth on Exhibit A.

**1.28****       ****“Transition Period”**means the period beginning on the Agreement Date and ending on the LicenseClosing Date.

**1.29****       ****“Territory”** means worldwide.

**1.30****       ****“Voting Agreement”**shallhave the meaning set forth in the Option Agreement.

**2****                                        ****DELIVERABLES**

**2.1****         ****Delivery****.**  Within five (5) days after the Agreement Date, Avica shall deliver toDTS, at a minimum, the following to the extent within Avica’s possession orreasonable control (individually and collectively, the **“Deliverables”**):

**2.1.1****      ** one (1) copy of the Source Code for each Avica Product in softcopyform; 

**2.1.2****      **one (1) copy of the Object Code for each Avica Product in softcopyform;

**2.1.3****      **one (1) copy of the Documentation in softcopy form; 

**2.1.4****      **a complete disk image of each build systemneeded to build each Avica Product, including the complete Source Code controldatabase, all current commercial build tools, all custom-built software toolsand complete build scripts (provided that DTS will be responsible for obtainingnecessary licenses for all commercial off-the-shelf or shrink wrap computersoftware, which shall be identified in writing by Avica within five (5) daysafter the Agreement Date);

**2.1.5****      **complete design and manufacturingdocumentation for all printed circuit boards used in each Avica Product,including a complete disk image of the circuit board design system, includingall current versions of schematic and printed circuit board source files andcurrent software tools for making Gerber files and drill drawings for eachAvica Product;

**2.1.6****      **complete design and manufacturingdocumentation for all mechanical components for each Avica Product, including acomplete disk image of the mechanical design system, including all currentversions mechanical drawings and current software tools, including all assemblyand fabrication drawings and packaging designs;

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**2.1.7****      **a complete disk image of the Avica Productdocumentation system, including complete sources for all manuals of any kind;and

**2.1.8****      **full manufacturing records, includingdetailed purchasing information for every build cycle for each Avica Product,including full details for any sub-contracted manufacturing, includingmechanical parts and printed circuit boards, as well as sub-system suppliers,printers and packaging suppliers.

**2.2****         ****Acceptance****.**  DTS shall have a period of thirty (30) daysfrom the date of delivery of the Deliverables as provided in Section 2.1for inspection and testing (the **“AcceptanceTesting”**) of such Deliverables to ascertain thatsuch Deliverables (i) are Operative; and (ii) substantially conform to theDocumentation (the **“Acceptance Criteria”**).  At the conclusion of Acceptance Testing, DTSwill inform Avica in writing whether the Source Code is accepted or rejectedfor failure to satisfy the Acceptance Criteria. If the Source Code is properly rejected, Avica, at its own expense andat no cost to DTS, will use the remaining time during the Transition Period tosatisfy the Acceptance Criteria and re-deliver the Source Code to DTS.  

**2.3****         ****Engineering Tool Updates****.**  During the Transition Period, Avica shallprovide DTS, at its own expense and at no cost to DTS, with any updates of theEngineering Tools to the extent such updates are within Avica’s possession orreasonable control.  

**3****             ****LICENSES**

**3.1****         ****Licensed Products****. **Subject to the terms and conditions of this Agreement, and effective asof the License Closing, Avica hereby grants to DTS an exclusive (even as toAvica, but subject to the Permitted Encumbrances), irrevocable, fully paid-up,royalty-free, license and right during the License Term to (the **“Exclusive License”**):

**3.1.1****      **develop, produce or have produced DerivativeWorks, make, have made, use, sell, offer for sale, have sold, import, export,reproduce, perform, display, distribute, have distributed and otherwise exploitLicensed Products and Licensed Services within the Field in the Territory; and

**3.1.2****      **allow others to exercise any such rights onbehalf of DTS, including the right to sublicense any and all of the rights in Sections3.1.1 to a third party; provided, however, that DTS shall not, withoutAvica’s prior written consent, have the right to enter into any sublicense(s)(whether in a single transaction or pursuant to a series of transactions) thatwould have the effect of transferring all or substantially all of DTS’ rightsand obligations under the Exclusive License with respect to commercializationof the Licensed IP to one or more unaffiliated third parties.

**3.2****         ****Documentation****. **Subject to the terms and conditions of this Agreement, Avica herebygrants to DTS an exclusive (even as to Avica, but subject to the PermittedEncumbrances), irrevocable, fully paid-up, royalty-free, license and rightduring the License Term to:

**3.2.1****      ** use and reproduce the Documentation to support the license rightsgranted in Section 3.1;

**3.2.2****      **modify the Documentation to produce or have produced Derivative Worksthereof; and

**3.2.3****      **distribute the Documentation and any Derivative Works thereof directlyor through DTS’ channels of distribution to end users in conjunction with themarketing, sale, support and maintenance of the Licensed Products, LicensedServices and/or DTS’ products and services.

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**3.3****         ****Exclusivity****.**  Forthe avoidance of doubt, except as otherwise specifically stated herein, Avicaacknowledges and agrees that during the License Term, notwithstanding anythingto the contrary expressed or implied herein, Avica shall not, without DTS’prior written consent, directly or indirectly create, develop, grant furtherlicenses, distribute, market, make, use, sell, import, export or otherwisecommercialize or make available any products in, for, or provide any servicesto any third party in the Field.

**3.4****         ****End User License Agreements****. **The end users’ use of the Licensed Products will be governed by andsubject to an end user license agreement, which will be reasonably similar tothe end user license agreements DTS generally uses for its own products orservices.

**4****                                        ****OWNERSHIP**

**4.1****         ****Reservation of Rights****.**

**4.1.1****      **Subject only to the licenses and rights specifically granted herein toDTS, as between the parties, Avica and its licensors shall retain ownership ofall rights, title and interest in and to the Licensed IP, the Avica Productsand the Documentation, and all copies thereof.

**4.1.2****      **Each party reserves all rights not expressly granted in this Agreement,and no licenses are granted by either party to the other under this Agreement,whether by implication, estoppel or otherwise, except as expressly set forthherein.

**4.2****         ****Ownership of DerivativeWorks****.**

**4.2.1****      **Subject to the provisions in Section 4.1 and 16.7, DTSshall have sole and exclusive ownership of all right, title and interest in andto the Derivative Works of the Licensed Products or Documentation created ordeveloped by or on behalf of DTS, all copies thereof, and all modifications andenhancements thereto (including ownership of all Intellectual Property Rightspertaining thereto, but excluding ownership of any underlying IntellectualProperty Rights owned by Avica prior to the Agreement Date).  Upon DTS’ request, Avica shall assist DTS inevery reasonable way, including by executing appropriate documents, at DTS’expense and request, to secure for DTS’ benefit all Intellectual PropertyRights in and to the Derivative Works (other than any underlying IntellectualProperty Rights owned by Avica prior to the Agreement Date).  If Avica is unable to fulfill its obligationsunder this Section 4.2.1, Avica hereby constitutes and appoints DTS thetrue and lawful attorney of Avica, with full power of substitution, in the nameof Avica, for the benefit of DTS to execute and deliver all such assignments,assurances or other documents, and to take and do all such other actions andthings as may be necessary or desirable to vest, perfect or confirm any and allright, title and interest in or to the Derivative Works.

**4.2.2****      **Notwithstanding anything herein to the contrary, DTS may choose todevelop or not to develop such Derivative Works at its sole option, and DTS isnot obligated to develop such Derivative Works.

**4.3****         ****Joint Intellectual PropertyRights**.

**4.3.1****      **DTS and Avica do not anticipate that anyjointly created or developed Intellectual Property Rights will arise as aresult of the relationship between the parties. Nevertheless, as the possibility of jointly created or developedIntellectual Property Rights cannot be entirely ruled out, and in order toavoid the formidable legal and business complications associated with jointintellectual property ownership, the parties hereby allocate ownership of alljointly created

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or developed Intellectual Property Rights(the **“Joint IPRs”**) solely toDTS.  Upon DTS’ request, Avica shall assist DTS inevery reasonable way, including by executing appropriate documents, at DTS’expense and request, to secure for DTS’ benefit all Intellectual PropertyRights in and to the Joint IPRs.  IfAvica is unable to fulfill its obligations under this Section 4.3.1,Avica hereby constitutes and appoints DTS the true and lawful attorney ofAvica, with full power of substitution, in the name of Avica, for the benefitof DTS to execute and deliver all such assignments, assurances or otherdocuments, and to take and do all such other actions and things as may benecessary or desirable to vest, perfect or confirm any and all right, title andinterest in or to the Joint IPRs.

**4.3.2****      **For the avoidance of doubt, DTS does not license to Avica, and Avicahas, and shall have, no rights with respect to, any of DTS’ IntellectualProperty Rights, including Joint IPRs, under this Agreement.

**4.4****         ****Trademarks****.**

**4.4.1****      **During the License Term, Avica hereby grants to DTS an exclusive (evenas to Avica, but subject to the Permitted Encumbrances), worldwide,royalty-free and limited license and right to use the name, logos, trademarksand service marks of Avica set forth on Exhibit B (**“Marks”**) solely in the Field in connectionwith DTS’ rights and obligations under this Agreement.  DTS’ use of the Marks shall comply withAvica’s trademark guidelines, as provided by Avica to DTS in writing from timeto time.  Subject only to the licensesand rights specifically granted herein to DTS, DTS acknowledges that Avica ownsall Intellectual Property Rights in the Marks.

**4.4.2****      **DTS agrees to use its commercially reasonable efforts to maintaintrademark registrations for the Marks in the jurisdictions identified on ExhibitB (the “**Key Marks**”) for a period beginningon the Agreement Date and ending on the third anniversary of the AgreementDate; provided, however, that such obligation shall apply solely to the extentthat, in DTS’ reasonable judgment, such Key Marks do not infringe upon therights of any third party.  In the eventthat DTS, in its sole discretion, determines not to maintain the trademarkregistrations for the Key Marks in any of the jurisdictions identified on ExhibitB following expiration of such three-year period, during the remainder ofthe License Term following expiration of such three-year period, (i) DTS shallprovide written notification to Avica of such decision, and (ii) Avica shallhave the right to take any reasonable actions to maintain such registrationsthat DTS does not maintain.

**4.4.3****      **Avica, at DTS’ request and expense, shall during the License Term: (i)execute all applications for trademark registrations, assignments or otherapplicable documents and (ii) perform any other act reasonably necessary forDTS to secure or maintain any and all of the Mark rights in any country inwhich DTS is marketing a product or service in association with a Mark.

**4.4.4****      **Subject to the other provisions of this Section 4.4, the partiesacknowledge and agree that DTS, in its sole discretion, is entitled toreproduce, market, distribute, sell and sublicense the Licensed Products andLicensed Services under DTS’ own name, trademarks or other designations oforigin.

**5****                                        ****DTS OBLIGATIONS**

DTS agrees to provide training and support to its sales and marketingpersonnel and representatives to enable them to market and distribute theLicensed Products and Licensed Services in the Field during the License Term.

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**6****             ****AVICA OBLIGATIONS**

**6.1****         ****Knowledge Transfer****. **During the Transition Period, Avica shall begin the knowledge transferprocess relating to the Licensed IP, Avica Products and Documentation and shallotherwise work cooperatively with DTS to prepare DTS to exploit the licensesand rights granted herein.

**6.2****         ****Referrals****.**  Duringthe License Term, Avica shall refer to DTS all inquiries and prospects thatwould be reasonably likely to be relevant to a transaction involving a LicensedProduct or Licensed Service in the Field.

**6.3****         ****Insurance****.** During the License Term, Avica shall obtain and maintain the followinginsurance policies (to the extent applicable): (i) workers’ compensation; and (ii) fire, liability and other forms ofinsurance as required under Third Party Licenses or other agreements relatingto the Licensed IP.  Avica shall be given30 days to cure any breach of this Section 6.3, as long as such breachis not a violation of Avica’s obligations to comply with applicable laws.

**7****                                        ****CONSIDERATION**

**7.1****         ****Fees****. **Subject to the terms and conditions of this Agreement, as considerationfor the Exclusive License, at the License Closing, DTS shall:

**7.1.1****      **pay $500,000 in cash to Avica; and

**7.1.2****      **deposit $4,500,000 into an escrow account (the **“LiabilityEscrow”**) to be established with a third party escrow agent selectedby DTS (the **“Escrow Agent”**), subject to theterms and conditions set forth in an escrow agreement to be entered into byDTS, Avica and the Escrow Agent (the **“Escrow Agreement”**).

**7.2****         ****Liability Escrow****.**

**7.2.1****      **Avica shall identify all of its liabilities on a schedule (the **“Schedule of Liabilities”**) in the Escrow Agreement, andAvica shall represent and warrant to DTS that the liabilities listed on theSchedule of Liabilities represent all liabilities of Avica as of the LicenseClosing.  The Schedule of Liabilities maybe amended from time to time by mutual written consent of the parties.  Upon execution of this Agreement, Avica shalldeliver to DTS a schedule of all of Avica’s liabilities as of the date hereof,including the identity of each creditor and the total amount owed, togetherwith a certificate of the Chief Executive Officer of Avica certifying that suchSchedule of Liabilities is true, accurate and complete in all respects as ofAgreement Date.

**7.2.2****      **Until all of the liabilities listed on the Schedule of Liabilities are satisfiedin full by Avica as described in the Escrow Agreement, the Liability Escrowshall be used solely to satisfy such liabilities.  Only after the Escrow Agent has received anexecuted release from each creditor listed on the Schedule of Liabilities pursuantto the terms and conditions set forth in the Escrow Agreement and theliabilities listed on the Schedule of Liabilities have been satisfied in fullas described in the Escrow Agreement, the Escrow Agent shall distribute toAvica all funds that remain in the Liability Escrow.

**7.3****         ****Additional Consideration****.**  Within thirty (30) days of revenuerecognition (in accordance with GAAP) with respect to the sale by DTS of *** (providedsuch revenue recognition has occurred within three years of the AgreementDate), DTS will pay to Avica as follows:

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**7.3.1****      **a one-time cash payment of $1,500,000 upon ***

**7.3.2****      **an additional one-time cash payment of $1,000,000 upon ***; and

**7.3.3****      **an additional one-time cash payment of $350,000 upon ***.

For the avoidance of doubt, in order for the amount specified in any ofSections 7.3.1, 7.3.2 or 7.3.3 to become payable, it isnot necessary to first satisfy the conditions precedent in the other of suchsubsections; provided, however, that ***.

**7.4****         ****Audit Rights****. **During the License Term, DTS shall keep accurate records in sufficientand customary detail such that the amounts payable under Section 7.3 maybe verified.  No more frequently thanonce every twelve months, DTS will permit an independent audit of its relevantfinancial records directly relating to the Exclusive License for the solepurpose of verifying the accuracy of any and all payments required by DTS underSection 7.3.  Such audit shall berequested with at least twenty (20) business days’ prior written notice,conducted during normal business hours, and situated on DTS’ premises or suchother location as DTS in its sole reasonable opinion shall determine.  The audit must be conducted in strictconfidence and by an independent auditor reasonably acceptable to DTS, who isbound by a written confidentiality agreement with provisions that are at leastas protective of DTS’ Confidential Information as those set forth in thisAgreement.  The audit must further be conductedat Avica’s expense, unless the audit determines that DTS underpaid Avica, inwhich case (i) the amount of such underpayment shall immediately become due andpayable by DTS to Avica and (ii) DTS shall reimburse Avica for the reasonable,documented costs of such audit.

**7.5****         ****Payment****.**  DTSshall pay all amounts due under this Agreement in U.S. dollars by wire transferin same day funds to Avica’s account at *** as follows:

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or at such other account as Avica may provide to DTS in a writtennotice pursuant to Section 14.

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**8****                                        ****CONFIDENTIALITY**

A party receiving or having access to Disclosing Party’s ConfidentialInformation (each, a **“Recipient”**) will not useDisclosing Party’s Confidential Information except as permitted herein, andwill not disclose, except as expressly permitted herein, such ConfidentialInformation to any third party except to Recipient’s employees and consultantsas is reasonably required in connection with the exercise of Recipient’s rightsand obligations under this Agreement (**“AuthorizedRepresentatives”**).  EachRecipient will ensure that each of its Authorized Representatives, beforeobtaining access to the Disclosing Party’s Confidential Information, is boundby a written confidentiality agreement, with provisions to protect suchConfidential Information at least as restrictive as those containedherein.  Each Recipient shall beresponsible for any breach of this Section 8 by its AuthorizedRepresentatives.  Each Recipient agreesthat it shall take all reasonable measures to protect the secrecy of and avoiddisclosure or use of Confidential Information of the Disclosing Party in orderto prevent it from falling into the public domain or the possession of personsother than those persons authorized under this Agreement to have any suchinformation.  Such measures shall includethe highest degree of care that Recipient utilizes to protect its ownConfidential Information of a similar nature, which shall be no less thanreasonable care.  However, each Recipientmay disclose Confidential Information of Disclosing Party:  (i) pursuant to the order or requirement of acourt, administrative agency or other governmental body, provided thatDisclosing Party gives reasonable notice to the other party to contest suchorder or requirement; and (ii) on a confidential basis to legal or financialadvisors who shall be deemed to be Authorized Representatives hereunder.  Whether or not a protective order or othersuch remedy is obtained, or whether the Disclosing Party waives compliance withthe provisions hereof, Recipient agrees to (a) furnish only that portion of theConfidential Information that Recipient is legally required to furnish ordisclose and (b) exercise Recipient’s reasonable efforts to obtain assurancethat confidential treatment is accorded such Confidential Information.  Upon expiration or termination of theAgreement for any reason, Recipient shall promptly destroy or return to theDisclosing Party (as the Disclosing Party shall instruct) all documents andother tangible materials representing the Disclosing Party’s ConfidentialInformation and all copies thereof, and purge all electronic copies or otherrepresentations thereof that are under Recipient’s direct or indirectcontrol.  Notwithstanding the foregoing,either party’s legal counsel shall be permitted to retain one (1) copy of allsuch Confidential Information in its records for archival purposes, providedsuch Confidential Information remains subject to the terms and conditions setforth in this Section 8.

**9****                                        ****REPRESENTATIONS ANDWARRANTIES**

**9.1****         **Avica hereby represents, warrants andcovenants to DTS that, except as set forth on Schedule 9.1 attachedhereto:

**9.1.1****      **Avica has the full right and power and legal capacity and authority toenter into and perform according to the terms of this Agreement.

**9.1.2****      **As of the License Closing Date, Avica has secured valid writtenassignments from all current employees and current and former consultants whocontributed to the creation or development of the Owned IP of such person’sownership interest therein.  To the bestof Avica’s knowledge, none of the employees or consultants of Avica is inviolation thereof and no such rights vest with anyone other than Avica.

**9.1.3****      **All employees of, consultants to or vendors of Avica with access toconfidential information of Avica are parties to written agreements under whicheach such employee, consultant or vendor is obligated to maintain theconfidentiality of confidential information of Avica.

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To the best of Avica’s knowledge, none of the employees, consultants orvendors of Avica or any of its subsidiaries is in violation of such agreements.

**9.1.4****      **Avica is the sole owner of the entire right, title and interest in andto each item of the Owned IP, free and clear of any Encumbrances, other thanthe Permitted Encumbrances.

**9.1.5****      **The Licensed IP includes all of the Intellectual Property Rights usedin the conduct of the business of Avica as it has been conducted to date.

**9.1.6****      **To the best of Avica’s knowledge, no right, license, lease, consent orother agreement is required with respect to any Intellectual Property Right forthe conduct of the business of Avica as it has been conducted to date otherthan the Third Party Licenses.  Avica isentitled to use the Third Party IP in the ordinary course of business.

**9.1.7****      **To the best of Avica’s knowledge, the patents included in the Owned IPand, to Avica’s actual knowledge, the patents included in the Licensed IP (i)are in good standing, all without challenge of any kind; (ii) are valid andenforceable; and (iii) have not been adjudged invalid or unenforceable in wholeor part.

**9.1.8****      **All Owned IP, including any registrations and applications therefor,have been duly maintained and all filing fee(s), maintenance fee(s), annuityfee(s) or renewal fee payment(s) for each jurisdiction in which each patent,patent application, trademark, trademark application, trade name, trade nameregistration, brand name, brand name registration, service mark, service markregistration, copyright, copyright application, domain name or domain nameapplication included within the Owned IP has issued or is pending have beentimely paid.  None of the patents orpatent applications in the Owned IP is involved in or the subject of anyopposition, interference, reexamination, cancellation or other legal orgovernmental proceeding in any jurisdiction, and, to the best of Avica’sknowledge, there has been no threat or other indication that any suchproceeding will hereafter be commenced.

**9.1.9****      **(i) The development, manufacture, marketing, use, sale, distribution,import, export or other commercial exploitation of any of the Avica Products orLicensed Products by Avica, in each case in connection with the operation ofthe business of Avica as it has been conducted to date, does not infringe upon,misappropriate, violate, dilute (with respect to any Marks) or otherwiseconstitute the unauthorized use of, the Intellectual Property Rights of anythird party; and (ii) no claim is pending or, to the best of Avica’s knowledge,threatened against Avica alleging any of the foregoing.

**9.1.10****    **To the best of Avica’s knowledge, no third party is engaging in anyactivity that infringes or misappropriates the Licensed IP.

**9.1.11****    **Avica is not a party to any verbal contract, agreement or arrangement,except as set forth on Exhibit C (**“Existing VerbalAgreements”**).  A summary ofthe material terms and conditions of such Existing Verbal Agreements is setforth on Exhibit C.

**9.1.12****    **(i) Avica has all necessary rights in the Licensed Products to grantDTS the licenses and rights set forth herein; (ii) the licenses, including theExclusive License, and rights granted in this Agreement do not conflict with,or result in any violation of, or default (with or without notice or passage oftime, or both) under, or give rise to a right of termination, cancellation oracceleration of any obligation or loss of a benefit under the terms of anyagreement between Avica and any third party; (iii) DTS shall not be required toseek permissions from or make payments to any third parties in order toexercise the license rights to the Licensed Products set forth herein;

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(iv) the Avica Products are not libelous and do not violate any rightsof privacy and/or publicity of any third party; and (v) no instruction, adviceor information contained in the Avica Products is injurious to the end user.

**9.1.13****    **Each hardware component of the Avica Products (other than commerciallyavailable third-party components) is free from Errors and material defects inmaterials and workmanship.

**9.1.14****    **The Avica Products substantially conform to the functionality describedin the Documentation.

**9.1.15****    **Personnel of Avica shall be available to consult with respect to theLicensed Products with DTS and its personnel, at such times and for suchperiods as DTS may reasonably request during the Transition Period.

**9.1.16****    **In the development of the Licensed Products and their content, alllaws, statutes, ordinances, rules and regulations of each country, state, cityor other political entity having jurisdiction over development of the LicensedProducts were fully complied with.

**9.1.17**     The credit, attribution and/oracknowledgement lists and other materials delivered by Avica to DTS under thisAgreement are true, accurate and complete in all material respects, and DTSshall incur no liabilities to any third parties arising out of the use of suchlists and materials pursuant to DTS’ license rights in the Licensed Products.

**9.1.18****    **Avica has not and will not take any actions that: (i) assign, delegateor transfer, or purport to assign, delegate or transfer, any of the Licensed IPto any third party; (ii) create, or purport to create, any obligation on behalfof DTS; or (iii) grant, or purport to grant, any rights or immunities to anythird party under DTS’ Intellectual Property Rights or other proprietaryrights.

**9.1.19**     Avica has disclosedand delivered to DTS all books, records, files, documents and agreements ofAvica related to the Licensed IP, Licensed Products and Licensed Services,including, all documentation related to Intellectual Property Rightsregistrations or applications, or any and all Permitted Encumbrances thereon.

**9.1.20**     Avica shall comply with all applicable lawsand regulations with respect to its performance under this Agreement.

**9.2****                              **DTS hereby represents, warrants and covenantsto Avica that:

**9.2.1****      **DTS has the full right, power, legal capacity and authority to enterinto this Agreement and to carry out the terms and conditions hereof.

**9.2.2****      **DTS shall comply with all applicable laws and regulations with respectto its performance under this Agreement.

**9.3****         **These representations and warranties shall bedeemed to have been given by the parties at execution of this Agreement and,with respect to each Deliverable provided hereunder, upon delivery of suchDeliverable pursuant to this Agreement. These representations and warranties shall survive expiration ortermination of this Agreement.

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**9.4****         **THE FOREGOING WARRANTIES ARE IN LIEU OF ALLOTHER WARRANTIES OR CONDITIONS, AND EXCEPT FOR THE EXPRESS WARRANTIES ORCONDITIONS STATED IN THIS AGREEMENT, THE PARTIES MAKE NO ADDITIONAL WARRANTIESOR CONDITIONS, EXPRESS OR IMPLIED.  INPARTICULAR, EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS SECTION 9,ANY AND ALL WARRANTIES AND CONDITIONS OF MERCHANTABILITY, AND FITNESS FOR APARTICULAR PURPOSE OR NON-INFRINGEMENT ARE EXPRESSLY EXCLUDED.

**10****                                 ****INDEMNIFICATION**

**10.1****                       ****Indemnity****.**  

**10.1.1****    **Avica will, at its sole expense and upon DTS’ written request, defendDTS, including its successors and assigns, and their respective directors,officers, employees, agents, customers, affiliates, and distributors(collectively, **“DTS Indemnitees”**),from and against any and all suits, claims, actions, demands or proceedingsasserted against any DTS Indemnitee, and Avica will pay, indemnify and holdharmless each DTS Indemnitee from any and all liabilities, damages, losses,judgments, settlements, costs or expenses, including attorney’s fees, incurredby or assessed against, any DTS Indemnitee, to the extent the same arise out ofany (i) actual or alleged, direct, contributory or other infringement ormisappropriation by Avica or any Avica Product upon any Intellectual PropertyRight, contractual or other rights of any third party; (ii) breach of any ofAvica’s representations or warranties in this Agreement; (iii) bodily harm(including death) or any property damage caused by the Avica Products(excluding hardware components in such Avica Products that are either purchasedfrom third parties or licensed pursuant to Third Party Licenses) manufacturedon or prior to the License Closing, (iv) violation by Avica of any applicablelaw, rule or regulation; or (v) the negligence, misrepresentation, orerror or omission on the part of Avica or any employee, agent or representativeof Avica.  

**10.1.2****    **DTS will, at its sole expense and upon Avica’s written request, defendAvica, including its successors and assigns, and their respective directors,officers, employees, agents, customers, affiliates, and distributors(collectively, **“Avica Indemnitees”**),from and against any and all suits, claims, actions, demands or proceedingsasserted against any Avica Indemnitee, and DTS will pay, indemnify and holdharmless each Avica Indemnitee from any and all liabilities, damages, losses,judgments, settlements, costs or expenses, including attorney’s fees, incurredby or assessed against, any Avica Indemnitee, to the extent the same arise outof any (i) third party claim that a Licensed Product infringes such thirdparty’s Intellectual Property Rights, where such claim would have been avoidedby the exclusive use of the Avica Products; or (iii) breach of any of DTS’representations or warranties in this Agreement.

**10.1.3****    **If a party becomes aware of any such claim subject to indemnificationhereunder, the party will provide the other party with reasonably prompt noticeof the claim and reasonable cooperation in the defense thereof.  Neither party will settle any such claimwithout the other party’s written consent, which will not be unreasonablywithheld.  The indemnified party willhave the right to approve the counsel selected by the indemnifying party todefend any such claim (such approval not to be unreasonably withheld) and willalso have the right to have its own counsel participate in the defense of anysuch claim at its own expense.

**10.2****       ****Duty to Correct****. **In addition to Avica’s indemnification obligations, if DTS reasonablybelieves or it is determined that any of the Avica Products may have violated athird party’s Intellectual Property Rights, Avica will, at its option and solerisk and expense:  (i) procure for DTSthe rights to continue exploiting the licenses and rights granted herein; or (ii)modify the

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subject Avica Products so that they becomenon-infringing.  Any such replacement ormodification must substantially conform to the Specifications and theDocumentation.

**10.3****       ****Covenant Not to Sue****.** During the License Term, Avica covenants that it will not, without theprior written consent of DTS, assert against DTS, any DTS affiliate or any DTSlicensee, end user, distributor, representative, licensee or customer, a claimof direct or indirect patent or other Intellectual Property Right infringementarising from the exercise of the licenses and rights granted herein or sale,use, distribution or other disposal of the Licensed Products, LicensedServices, Derivative Works, Documentation or any DTS product or service.

**11****                                 ****PROSECUTION AND MAINTENANCEOF LICENSED IP**

During the License Term, subject to the otherprovisions set forth in this Section 11, DTS shall have sole control of,and be responsible for, filing, prosecution and maintenance of the Licensed IP,and DTS shall pay the expenses thereof. Avica agrees to cooperate with DTS in such preparation, filing,prosecution and maintenance of the Licensed IP, and DTS shall consult withAvica and/or its inventors regarding material issues during prosecution.  During the License Term, Avica hereby grantsDTS an irrevocable power of attorney to undertake such activities and toexecute and file all instruments necessary or appropriate in connectiontherewith.  Upon reasonable request byAvica, DTS shall make available to Avica copies of any significant documentsthat DTS receives from or sends to any relevant intellectual property officesincluding, without limitation, any official actions, responses, notices ofinterferences, re-examinations, oppositions or requests for patent termextensions.  Upon receipt of a notice ofallowance of a pending patent application in the Licensed IP in existence of asof the Agreement Date, and in the event that DTS intends to elect not to file acontinuation or divisional in connection with such patent application prior tothe issuance of the related patent, (i) DTS shall provide written notice ofsuch election to Avica; and (ii) DTS shall pay the issue fee relating to suchpatent application no earlier than thirty (30) days following the date of suchwritten notice to Avica; and (iii) Avica shall have the right at its sole costand expense to file and prosecute one or more continuation or divisional patentapplications (each an “**Additional PatentApplication**”) claiming priority to such patent application.  In the event that Avica exercises its rightsunder this Section 11 to file and prosecute any Additional PatentApplications, such Additional Patent Applications, and any patents that issuethereon, shall be deemed to be Licensed IP for purposes of this Agreement.

**12****                                 ****ENFORCEMENT ACTIONS**

**12.1****       **During the License Term, if a third party infringes orallegedly infringes any Intellectual Property Rights in the Licensed IP withinField, DTS shall have the right, but not the obligation, to prosecute theinfringer by appropriate legal proceedings; provided that DTS shall informAvica of all developments in such proceedings. DTS shall be responsible for all costs and expenses of any enforcementactivities, including legal proceedings, against infringers that DTSinitiates.  Avica agrees to cooperate inall reasonable respects with any enforcement proceedings at the request of DTS,and at DTS’ expense.  Avica may berepresented by Avica’s counsel in any such legal proceedings, at Avica’s ownexpense (subject to reimbursement under this Section 12), acting in anadvisory but not controlling capacity. The prosecution, settlement orabandonment of any proceeding under this Section 12 shall be at DTS’reasonable discretion, provided that DTS shall not grant any rights in or toany of the Licensed IP in excess of the rights licensed to DTS hereunder.Recoveries collected by DTS shall be paid (i) first, to DTS in the amount ofall documented and reasonable out-of-pocket costs and expenses (includingattorneys fees) incurred by DTS in such action, (ii) then to Avica to reimburseAvica for its documented and reasonable out-of-pocket costs and expenses(including attorneys fees) incurred in cooperating with DTS in such action asrequested by DTS, and (iii) for the remainder, if any, the recovery shall bepaid to DTS.

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**12.2****       **In the event that (i) DTS’ general counsel in his reasonableopinion believes that a third party infringes one of the Key Marks and (ii) DTSdoes not intend to exercise its rights to prosecute such third party byappropriate legal proceedings, then (a) DTS shall provide written notificationto Avica, and (b) Avica shall have the right at its sole cost and expense tocommunicate with and prosecute such third party by appropriate legalproceedings with respect to such potential infringement, and all recoveriesobtained by Avica in connection therewith shall belong exclusively to Avica.

**12.3****       **In the event that (i) DTS’ general counsel knows that a thirdparty is infringing a patent in the Licensed IP and (ii) DTS does not intend toexercise its rights to prosecute such third party by appropriate legalproceedings or otherwise enter into an agreement with such third party, then(a) DTS shall provide written notification to Avica; provided, however, thatDTS shall be obligated to provide written notification to Avica under this Section12 only upon the first single occurrence of such infringement for eachpatent in the Licensed IP; and (b) Avica shall have the right at its sole costand expense to communicate with and prosecute such third party by appropriatelegal proceedings with respect to such potential infringement, and allrecoveries obtained by Avica in connection therewith shall belong exclusivelyto Avica.

**13****                                 ****RELATIONSHIP OF PARTIES**

The parties to this Agreement are independent contractors.  Nothing in this Agreement shall be construedas establishing any relationship of representatives, partnership, jointventure, employment, franchise or agency between the parties.  Neither party will have the power to bind theother or incur obligations on the other party’s behalf without the otherparty’s written consent.

**14****                                 ****NOTICES AND REQUESTS**

 All notices, claims and demandshereunder, and all other communications which are required to be given inwriting pursuant to this Agreement, shall be in writing and shall be given (andshall be deemed to have been duly given upon receipt) by delivery in person orfacsimile (received at the facsimile machine to which it is transmitted priorto 5 p.m., local time, on a business day for the party to which it is sent, orif received after 5 p.m., local time, as of the next business day) or byregistered or certified mail (postage prepaid, return receipt requested) to therespective parties at the following addresses (or at such other address for aparty as shall be specified in a notice given in accordance with this Section14):
| **AVICA:**           | Avica Technology Corporation         |
|----------------------|--------------------------------------|
|                 | 1201 Olympic  Blvd.                  |
|                 | Santa Monica, CA  90404              |
|                 | Attention:  Nicholas J. Clay         |
| Telephone:           | (310) 985-9840                       |
|                 |                                 |
| **with a  copy to:** |                                 |
| ** **           |                                 |
|                 | Mitchell  Silberberg & Knupp LLP |
|                 | 11377 West  Olympic Blvd.,           |
|                 | Los Angeles, CA  90064               |
|                 | Attention: Jan  Powers, Esq.         |
| Telephone:           | (310) 312-3257                       |
| Facsimile:           | (310) 231-8357                       |

 

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| **DTS:**             | DTS, Inc.                        |
|----------------------|----------------------------------|
|                 | 5171 Clareton  Drive             |
|                 | Agoura Hills, CA  91301          |
|                 | Attention:  General Counsel      |
| Telephone:           | (818) 706-3525                   |
| Fax:                 | (818) 827-2470                   |
|                 |                             |
| **with a  copy to:** |                             |
| ** **           |                             |
|                 | Heller Ehrman  LLP               |
|                 | 4350 La Jolla  Village Drive     |
|                 | San Diego, CA  92122             |
|                 | Attention: Kirt  Shuldberg, Esq. |
| Telephone:           | (858) 450-8400                   |
| Facsimile:           | (858) 450-8499                   |

 

**15****                                 ****CLOSING**

**15.1****       ****Closing****.**   Theclosing under this Agreement (the **“License Closing”**)will take place at 10:00 a.m., Pacific Standard Time, on a date to be specifiedby the parties, which shall be no later than the second (2nd) business dayafter satisfaction or waiver of the conditions (excluding conditions that, bytheir terms, cannot be satisfied until the License Closing) set forth in Section15.2, unless another time or date is agreed to by the parties (the **“License Closing Date”**). The License Closing will be held at the offices of Heller Ehrman, 4350La Jolla Village Drive, 7th Floor,San Diego, CA  92122, or such otherlocation as the parties hereto shall agree to in writing.  If the conditions precedent set forth in Section15.2 are satisfied as of execution of this Agreement, the License Closingwill be deemed to occur on the date of execution.

**15.2****       ****Conditions Precedent****.**  DTS’obligation to effect the License Closing is subject to the satisfaction orwaiver on or prior to the License Closing Date of the following conditions:

**15.2.1****    *****

**15.2.2****    *****

**15.2.3****    *****

**15.2.4****    *****

**15.2.5****    *****

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**15.2.6****    *****

**15.2.7****    *****

**15.2.8****    *****

**15.2.9****    *****

**15.2.10**** *****

**15.2.11**** *****

**16****                                 ****TERM; TERMINATION**

**16.1****                       ****License Term****.**

**16.1.1****    **The term of the Exclusive License shall commence upon the LicenseClosing and shall last until three years following completion by Avica of theClean-up Conditions set forth in Section 16.2 to the reasonablesatisfaction of DTS (the **“License Term”**).

**16.1.2****    **Notwithstanding the foregoing or anything else to the contrary in thisAgreement, once a Licensed Product is sold or a Licensed Service is rendered toa third party, the Exclusive License shall be deemed to be perpetual withrespect to that particular unit or instance of the Licensed Product or LicensedService without regard to the License Term.

**16.2****       ****Clean-up Conditions**.  For purposes of this Agreement, the term **“Clean-up Conditions”** means the completion by Avica of allof the following conditions, as acknowledged in writing by DTS, which acknowledgementshall not be unreasonably withheld:

**16.2.1****             *****

**16.2.2****             *****

**16.2.3****             *****

**16.2.4****             *****

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**16.2.5****             *****

**16.2.6****             *****

**16.2.7****             *****

**16.3****       ****Survival****.** Inthe event of expiration or termination of this Agreement, Sections 1, 3.1but only to the extent set forth in Section 16.1.2, 4, 7 (onlywith respect to any unpaid payments thereunder), 8, 9, 10, 16.1.2, 16.3,16.4, 16.7, 17, 18 and 19 shall survive this Agreement for aperiod of two (2) years.

**16.4****       ****Effect of Termination Due to Bankruptcy**.  This Agreement constitutes a license ofintellectual property as defined in Section 101(35a) of the Bankruptcy Codethat is executory in nature until terminated. If this Agreement is rejected in any bankruptcy proceeding, then inaddition to all other rights hereunder, the parties agree that DTS will beentitled to all rights under Section 365(n) of the Bankruptcy Code, includingthe embodiment of Intellectual Property Rights and any updates and enhancementscreated after the date of this Agreement.

**16.5****       ****Termination of Option Agreement****.**  This Agreement shall automatically terminateif DTS unilaterally terminates the Option Agreement or if the Option Agreementexpires unexercised.

**16.6****       ****Termination by Mutual Written Consent****.**  This Agreement may be terminated upon themutual written consent of the parties.

**16.7****       ****Effect of Termination or Expiration****.**  Upon expiration or termination of thisAgreement or the License Term, subject only to the provisions of Section16.1.2 of this Agreement, (i) except as set forth below, all licenseshereunder shall immediately terminate; (ii) DTS shall immediately cease all useof the Licensed IP; and (iii) DTS shall immediately cease all production,distribution, use, sales, offers for sale, importing, exporting or otheractivities with respect to any product or service that includes, embodies orinfringes upon any of the Licensed IP. Notwithstanding the foregoing, termination or expiration of thisAgreement shall not affect:  (a) therights and obligations of either party with respect to Licensed Products soldprior to expiration or termination; (b) any obligations imposed by thisAgreement that expressly survive expiration or termination; (c) any liabilityfor damages resulting from an actionable breach; (d) any licenses orsublicenses granted to customers or end users under this Agreement, which shallsurvive any expiration or termination of this Agreement in accordance withtheir terms; and (e) DTS’ ability to exercise the licenses and rights grantedhereunder as necessary to provide technical support and maintenance for itscustomers or end users with respect to the licenses or sublicenses granted priorto such expiration or termination.

**17****                                 *********

**17.1****       *****

**17.2****       *****

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***

**17.3****       *****

**18****                                 ****LIMITATION OF LIABILITY**

WITH THE EXCEPTION OF EITHER PARTIES’ CONFIDENTIALITY (SECTION 8)OR INDEMNITY (SECTION 10) OBLIGATIONS, NEITHER PARTY SHALL BE LIABLE TOTHE OTHER FOR ANY SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANYKIND OR NATURE WHATSOEVER, RELATING TO THE PRODUCT, THIS AGREEMENT OR THETRANSACTIONS CONTEMPLATED HEREBY, INCLUDING LOST PROFITS OR LOST GOODWILL ANDWHETHER BASED ON BREACH OF ANY EXPRESS OR IMPLIED WARRANTY, BREACH OF CONTRACT,TORT (INCLUDING NEGLIGENCE) OR STRICT LIABILITY, REGARDLESS OF WHETHER SUCHPARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE OR IF SUCH DAMAGECOULD HAVE BEEN REASONABLY FORESEEN.

**19****                                 ****GENERAL**

**19.1****       ****Severability.**  If any term or other provision of thisAgreement is invalid, illegal or incapable of being enforced by any rule ofapplicable law, or public policy, all other conditions and provisions of thisAgreement shall nevertheless remain in full force and effect so long as theeconomic or legal substance of the matters referred to herein are not affectedin any manner materially adverse to any party. Upon such determination that any term or other provision is invalid,illegal or incapable of being enforced, the parties hereto shall negotiate ingood faith to modify this Agreement so as to effect the original intent of theparties as closely as possible in a mutually acceptable manner in order thatthe matters referred to herein be consummated as originally contemplated to thefullest extent possible.

**19.2****       ****Entire Agreement; Assignment****.**  This Agreement, together with the RelatedAgreements, constitutes the entire agreement among the parties with respect tothe subject matter hereof and thereof and supersedes all prior agreements andundertakings, both written and oral, among the parties, or any of them, withrespect to the subject matter hereof and thereof.  DTS shall have the right to assign all of itsrights and obligations under this Agreement to any entity which is, at the timeof assignment, an Affiliate of DTS, notwithstanding that the assignee may notcontinue to be an Affiliate of DTS thereafter; provided, that no suchassignment to an Affiliate shall relieve the assigning party of its obligationshereunder.  In the event of such anassignment, all rights and obligations of DTS hereunder shall be deemed to berights and obligations of such assignee. DTS or its assignee shall also have the right to assign all of itsrights and obligations under this Agreement to any person that acquires amajority by voting power of all of the capital stock, or substantially all ofthe assets, of DTS or its assignee or the division or business unit of DTS orits assignee responsible for the business of Avica; provided, that such personassumes this Agreement, in writing, and agrees to be bound by and to complywith all of the terms and conditions hereof. Avica shall not assign, delegate or transfer its rights and obligationsunder this Agreement to any third party without the prior written consent ofDTS.  For purposes of this Agreement, an “assignment” by Avica under this Section19.2 shall be deemed to include each of the following: (a) a change inbeneficial ownership of Avica of greater than twenty percent (20%) (whether ina single transaction or series of transactions); (b) a merger of Avica withanother party, whether or not Avica is the surviving entity;

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(c) the acquisition of more than twenty percent(20%) of any class of Avica’s voting stock (or any class of non-voting securityconvertible into voting stock) by a person who is not currently a shareholderof Avica (whether in a single transaction or series of transactions); and (d)the sale of more than twenty percent (20%) of Avica’s assets (whether in asingle transaction or series of transactions); provided, however, that anassignment shall not be deemed to include (i) any change in beneficialownership resulting from the conversion of convertible securities, outstandingas of the Agreement Date, by existing Avica Stockholders, or (ii) any change inbeneficial ownership resulting from a transfer of Avica shares made incompliance with Avica’s Bylaws, as in effect on the Agreement Date, to anythird party who is not in DTS’ judgment a competitor or potential competitor ofDTS and so long as each permitted transferee agrees in writing to be bound byand comply with the terms and conditions of the Voting Agreement as if suchtransferee were a Shareholder (as defined in such Voting Agreement) and asignatory to such Voting Agreement. Subject to the foregoing, this Agreement shall inure to the benefit ofand be binding upon the respective permitted successors and assigns of the parties.

**19.3****       ****Specific Performance****.**  Theparties hereto agree that irreparable damage would occur in the event that anyprovision of this Agreement was not performed in accordance with the termshereof and that the parties shall be entitled to specific performance of theterms hereof, in addition to any other remedy at law or equity.

**19.4****       ****Governing Law****.**  ThisAgreement shall be governed by, and construed in accordance with the laws ofthe State of California applicable to contracts executed in and to be performedin that state.

**19.5****       ****Consent to Jurisdiction****. **Avica and DTS consent to jurisdiction andvenue in the state and federal courts in Los Angeles, California.

**19.6****       ****Headings; Interpretation****.** The descriptive headings contained in thisAgreement are included for convenience of reference only and shall not affectin any way the meaning or interpretation of this Agreement.  Whenever the word **“include,”****“includes,”** or **“including”**appears in this Agreement, it shall be deemed in each instance to be followedby the words “without limitation.”

**19.7****       ****Counterparts****.** This Agreement may be executed and delivered(including by facsimile transmission) in any number of counterparts, and by thedifferent parties hereto in separate counterparts, each of which when executedand delivered shall be deemed to be an original but all of which taken togethershall constitute one and the same agreement.

**19.8****       ****Fees and Expenses****.** All costs and expenses incurred in connectionwith this Agreement and the Asset Purchase by Avica shall be paid byAvica.  All costs and expenses incurredin connection with this Agreement and the Asset Purchase by DTS shall be paidby DTS.

**19.9****       ****Amendment****.**  Anywaiver, modification or amendment of any provision of this Agreement will beeffective only if in writing and signed by duly authorized representatives ofthe parties.

**19.10****     ****Waiver****.**  Atany time prior to the License Closing, DTS and Avica may agree to (i) extendthe time for the performance of any obligation or other act of the other partyhereto, (ii) waive any inaccuracy in the representations and warranties of theother contained herein or in any document delivered pursuant hereto, and (iii)waive compliance by the other, as the case may be, with any agreement orcondition contained herein.  Any suchextension or waiver shall be valid if set forth in an instrument in writingsigned by the party or parties to be bound thereby.  The failure by

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either party to enforce any provision of thisAgreement will not constitute a waiver of future enforcement of that or anyother provision.

**19.11****     ****Remedies****. **No remedy referred to in this Agreement is intended to be exclusive,but each shall be cumulative and in addition to any other remedy referred toherein or otherwise available at law, in equity or otherwise.

**19.12****     ****Force Majeure****. **Except with respect to the payment of money, neither party will beresponsible for any failure or delay in its performance under this Agreementdue to causes beyond its reasonable control, including labor disputes, strikes,lockouts, shortages of or inability to obtain labor, energy, raw materials orsupplies, war, riot, act of God or governmental action.

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IN WITNESS WHEREOF, the parties have caused thisAgreement to be executed as of the Agreement Date by their duly authorizedrepresentatives.
| **DTS, INC.**                     | ** **                            |
|-----------------------------------|---------------------------------------|
| ** **                        | ** **                            |
| ** **                        | ** **                            |
|   /s/  Jon E. Kirchner  |                                  |
| Name:                             | Jon Kirchner                          |   |
| Title:                            | President and Chief Executive Officer |   |
|                              |                                  |   |
|                              |                                  |   |
| **AVICA  TECHNOLOGY CORPORATION** |                                  |
|                              |                                  |
|                              |                                  |
|   /s/  Nicholas J. Clay |                                  |
| Name:                             | Nicholas J. Clay                      |   |
| Title:                            | Chairman and Chief Executive Officer  |   |

 

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**EXHIBIT A**

**IntentionallyOmitted.**

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**EXHIBIT B**

**AVICA MARKS**

**IntentionallyOmitted.**

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**EXHIBIT C**

**EXISTING VERBAL AGREEMENTS**

**IntentionallyOmitted.**

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**SCHEDULE 9.1**

**IntentionallyOmitted.**

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