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                                                                   EXHIBIT 10.50

                          JOINT DEVELOPMENT AGREEMENT

        This Joint Development Agreement ("Agreement") is made and entered into
effective as of this 14th day of December, 2001 ("Effective Date"), by and
between ESS Technology, Inc., ("ESS"), a California corporation, with its
principal place of business at 48401 Fremont Blvd., Fremont, CA 94538, USA, and
*** ("Counterparty*"), a corporation organized under the laws of ***, with its
principal place of business at ***.

                                    RECITALS

WHEREAS, ESS is engaged in the business of designing and developing MPEG 2
controller and other certain integrated circuits;

WHEREAS, Counterparty* is engaged in the business of designing and developing
*** and other certain integrated circuits;

WHEREAS, ESS and Counterparty* desire to work closely together to jointly
develop a *** product that combines the respective parties' MPEG 2 controller
and *** for DVD player application technology, and Counterparty* desires to
provide ESS ***;

WHEREAS, ESS and Counterparty* desire to enter into this Agreement to clarify
their respective rights and obligations to each other with respect to the joint
development of such new products among other things;

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

                                    AGREEMENT

1.      DEFINITIONS. As used in this Agreement, these terms shall have the
        following definitions:

        1.1 "Counterparty* Component" shall mean ***.

        1.2 "Counterparty* Deliverables" means the services and materials
        designated as "*** Deliverables" on the Development Schedule.

        1.3 "Counterparty* Existing IPR" shall mean the patents, copyrights,
        trade secrets, know-how and mask works based on inventions (whether
        patentable or not) developed on or prior to the Effective Date which are
        (a) owned or licensed by Counterparty* and which Counterparty* has the
        right to license or sublicense, (b) related to Counterparty* Component,
        and (c) reasonably necessary to develop, manufacture, use and sell the
        Combined Product.

        1.4 "Counterparty* Improvements" shall mean any modification, invention,
        discovery, development, or works of authorship, whether or not
        patentable, that modifies, improves upon, extends, enhances or
        constitutes a derivative work of the Counterparty* Existing IPR by
        either or both patties during the Term of this Agreement.


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        1.5 "Counterparty* IPR" shall mean the Counterparty* Existing IPR and
        Counterparty* Improvements. Counterparty* IPR does not include any trade
        name, trademark or service mark owned and/or used by Counterparty*.

        1.6 "Combined Product" shall mean all single chip devices, which
        integrates ESS Component and Counterparty* Component, developed jointly
        by the parties pursuant to this Agreement and which incorporates the
        functional specifications for the Combined Product set forth in Exhibit
        A. There are two major categories of Combined Product as set forth in
        Exhibit A.

        1.7 "Confidential Information" shall mean the information of either
        party ("Disclosing Party") which is disclosed to the other party
        (`Receiving Party') pursuant to this Agreement, in written form and
        marked "Confidential" or if disclosed orally, the Disclosing Party shall
        send a written summary of such information to the Receiving Party within
        thirty (30) days of the date of the initial disclosure and mark such
        summary "Confidential." Confidential Information shall include, but not
        be limited to, trade secrets, know-how, inventions, techniques,
        processes, algorithms, software programs, schematics, designs,
        contracts, financial information, and non-public business information.

        1.8 "Deliverables" shall mean the Counterparty* Deliverables and ESS
        Deliverables.

        1.9 "Development Schedule" shall mean the schedule of Deliverables and
        timetable set forth in Exhibit B for the development of the Combined
        Product.

        1.10 "Engineering NRE" shall mean the engineering fees, costs, expenses
        and other charges of the independent companies to produce and package
        the engineering silicon for Combined Product. The Engineering NRE is
        limited to the cost of the masks, engineering fabrication, engineering
        packaging and all third-party testing costs related thereto. Unless
        agreed by both parties in writing, any other cost not related to the
        masks, engineering fabrication, engineering packaging and all
        third-party testing, shall not included in Engineering NRE.

        1.11 "Specifications" shall mean the functional specifications, set
        forth in Exhibit A, developed by Counterparty* and ESS for the Combined
        Product, and as amended from time to time by mutual written agreement of
        the Parties.

        1.12 "ESS Component" shall mean ESS's MPEG 2 controller.

        1.13 "ESS Deliverables" shall mean the services and materials designated
        as ESS Deliverables on the Development Schedule.

        1.14 "ESS Existing IPR" shall mean the patents, copyrights, trade
        secrets, know how and mask works based on inventions (whether patentable
        or not) developed on or prior to the Effective Date which are (a) owned
        or licensed to ESS and which ESS has the right to

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        license or sublicense, (b) related to Counterparty*, and (c) reasonably
        necessary to develop, manufacture, use and sell the Combined Product.

        1.15 "ESS Improvements" shall mean any modification, invention,
        discovery, development, or works of authorship, whether or not
        patentable, that modifies, improves upon, extends, enhances or
        constitutes a derivative work of the ESS Existing IPR by either or both
        parties during the Term of this Agreement.

        1.16 "ESS IPR" shall mean ESS Existing IPR and ESS Improvements. ESS IPR
        does not include any trade name, trademark or service mark owned and/or
        used by ESS.

        1.17 "R&D" shall mean Research and development.

        1.18 "Sales cost" shall mean (a) direct marketing/sales costs,
        including but not limited to commission and related cost, calculated at
        ***% of total sales; (b) Indirect sales cost charge is limited to the
        maximum ***% of total sales only. Items and amount of each indirect
        sales cost shall be discussed and agreed by both parties in writing
        prior to the release of the Profit Sharing Report; (c) Inventory costs
        shall be calculated at ***% of total sales; (d) Handling charge is
        limited to the maximum of ***% of total sales in *** only. Items and
        amount of each handling charge shall be discussed and agreed by both
        parties in writing prior to the release of the Profit Sharing Report;
        (e) Sales rebate and marketing developing fund ("MDF") shall be counted
        as a portion of the cost of total sales, with the actual figure agree by
        both parties.

        1.19 "***" shall mean the *** provided by Counterparty*.

2.      R&D RESPONSIBILITIES

        2.1 ESS'S R&D OBLIGATIONS. ESS will perform the design, develop, and
        integrate the Combined Product.

        2.2 COUNTERPARTY* R&D OBLIGATIONS. Counterparty* will provide necessary
        help and materials set forth in Exhibit B, Deliverables & Development
        Schedule, under the heading "Counterparty* Deliverables".

        2.3     R&D COST.

                2.3.1 Counterparty* and ESS will each be responsible for ***% of
                the Engineering NRE.

                2.3.2 Each party shall be responsible for their own internal
                engineering costs necessary to produce the Deliverables and the
                Combined Product.

        2.4 WORK AND TIME TABLE. The Counterparty*, ESS Deliverables, and
        Development set forth in Exhibit B shall be provided by both parties
        within thirty (30) after the Effective Day. The parties will also use
        their reasonable diligent efforts to meet the

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        target date of the Development Schedule set forth in Exhibit B. The
        parties may mutually agree to amend the Development Schedule.

3.      INTERNAL USE LICENSES

        3.1 INTERNAL USE LICENSE TO COUNTERPARTY*. ESS hereby grants to
        Counterparty* during the Term a nonexclusive, nontransferable,
        worldwide, royalty-free license to use, reproduce and modify the ESS IPR
        and any materials delivered to Counterparty* under this Agreement,
        internally at Counterparty*, for the sole purpose of developing the
        Combined Product.

        3.2 INTERNAL USE LICENSE TO ESS. Counterparty* hereby grants to ESS
        during the Term a nonexclusive, nontransferable, worldwide, royalty-free
        license to use, reproduce and modify the Counterparty* IPR and any
        materials delivered to ESS under this Agreement, internally at ESS, for
        the sole purpose of developing the Combined Product.

4.      MANUFACTURING, MARKETING AND DISTRIBUTION

        4.1 LICENSE TO ESS. Counterparty* hereby grants to ESS, and ESS accepts,
        an *** license to utilize during the Term the Counterparty* IPR solely
        on or in connection with the development, manufacture, promotion,
        distribution and sale of the Combined Product. The license includes the
        right to sublicense to ESS's fab foundries the right to manufacture the
        Counterparty* IPR solely as a component of the Combined Product.

        4.2 LICENSE TO COUNTERPARTY*. ESS hereby grants to Counterparty*, and
        Counterparty* accepts, an *** license to utilize during the Term the ESS
        IPR solely on or in connection with the distribution and sale of the
        Combined Product. The license includes the right to sublicense to
        Counterparty*'s fab foundries the right to manufacture the ESS IPR
        solely as a component of the Combined Product..

        4.3 ESS SUBLICENSE. The licenses of Section 4.1 shall be non
        sublicensable except: (a) the right of ESS to sublicense the software
        object code of the Counterparty* IPR to end users of the Combined
        Product; (b) the right to sublicense the software source code to
        customers of Combined Product upon terms to be negotiated by the parties
        in good faith.

        4.4 COUNTERPARTY* SUBLICENSE. The licenses of Section 4.2 shall be non
        sublicensable except: (a) the right of Counterparty* to sublicense the
        software object code of the ESS IPR to end users of the Combined
        Product; (b) the right to sublicense the software source code to
        customers of Combined Product upon terms to be negotiated by the parties
        in good faith.

        4.5 MANUFACTURING. *** have the manufacturing right of the Combined
        Product. ESS shall place all Combined Product purchase orders to
        Counterparty*. After receiving purchase orders from ESS, *** shall
        operate the manufacturing of Combined Product.

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        ESS shall pay for all inventory of Combined Product, including but not
        limited to the wafer and packaged integrated circuit, ***.

        4.6 MARKETING. ESS shall be entitled to market, promote, and sell the
        Combined Product utilizing the ESS sales channel.

        4.7 PROFIT-SHARING. The profit sharing scheme is subject to Exhibit C of
        the Agreement.

        4.8 MODIFICATIONS TO PROFIT SHARING STRUCTURE. The parties reserve the
        right to alter the terms of Exhibit C as they may agree from time to
        time in writing.

        4.9 SUPPORT. Each party shall bear its own engineering support costs,
        and each party shall provide the necessary manpower, support and service
        to customers utilizing the ESS sales channel.

        4.10 MAINTENANCE. ESS agrees to use reasonable commercial efforts to
        make bug fixes as requested by Counterparty* to the ESS Component of the
        Combined Product to the extent that such proprietary information and
        technology are incorporated as part of the Combined Product.
        Counterparty* agrees to use reasonable commercial efforts to make bug
        fixes as requested by ESS to the Counterparty* Component of the Combined
        Product to the extent that such proprietary information and technology
        are incorporated as part of the Combined Product. Any such bug fixes
        shall be deemed to constitute ESS IPR or Counterparty* IPR, as
        applicable.

        4.11 ***. Counterparty* agrees to provide ESS *** with a reasonable
        price, where reason price means the cost of *** plus handling charge.

5.      ACCOUNTING; AUDIT; PAYMENT

        5.1 REPORTS AND-PAYMENT. ESS shall (i) render a profit sharing report
        ("Profit Sharing Report") within thirty (30) days after the close of
        each calendar month during the Term hereof, whether or not any payment
        is shown to be due thereunder, and (ii) remit the Profit Payments
        (defined in Exhibit C) due Counterparty*, if any, within thirty (30)
        days after the close of each calendar month during the Term hereof. The
        Profit Sharing Payments shall be paid in U.S. Dollars and acceptance
        thereof by the payee and shall not preclude the payee from questioning
        the correctness of the Profit Sharing Payment at any time. All Profit
        Sharing Payments shall be paid without set-off of any amount whatsoever.
        The Profit Sharing Reports shall be in a form mutually agreeable to the
        Parties and be consistent with the revenue and profit sharing
        arrangement described in section 4.6 hereof. The Profit Sharing Report
        shall contain at least the following information for the previous
        calendar quarter: (i) the *** of the Combined Product sold; (ii) the ***
        of Combined Product; (iii) all *** of the Combined Product thereof; (iv)
        each item of ***; and (v) the amount of the Profit Sharing Payment.

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        5.2 Each party shall keep complete and accurate records and accounts
        with respect to its manufacturing, sales and distribution of the
        Combined Product. These records shall be retained by each party for a
        period of not less than three (3) years after expiration or termination
        of this Agreement. Not more than twice per calendar year, the Parties
        shall be entitled to audit, through an independent auditor retained by
        the auditing party the other Parties books and records, upon at least
        thirty (30) days prior written notice to the other party. Each party
        shall pay to the other party an amount corresponding to the net amount
        of any underpayment of the profit sharings due hereunder within thirty
        (30) days after notice by the auditor of such underpayment or
        overpayment, as applicable, as well as an interest on such underpayment
        or overpayment at the rate of twelve percent (12%) per year, or the
        maximum rate permitted by law, whichever is lower. A failure to complete
        an audit and assert a claim within a three-year period after delivery of
        a Revenue and Profit Sharing Report shall constitute a waiver of the
        right to audit and/or assert a claim with respect to such Revenue and
        Profit Sharing Report. If a Party's duly authorized representative
        discovers a deficiency in the amounts due under this Agreement (an
        "Audit Deficiency") the audited Party shall promptly pay such Audit
        Deficiency to the auditing Party and, if such Audit Deficiency is five
        percent (5%) or more of the amount paid to the auditing Party for such
        audit period, the audited Party shall also reimburse the auditing Party
        for all reasonable costs and expenses incurred by the auditing Party in
        connection with such audit and collection of the Audit Deficiency. The
        results of such audit shall be deemed Confidential Information pursuant
        to Section 10 hereof.

6.      RESPONSIBILITY FOR TAXES

        Each party agrees to pay, indemnify and, hold the other party harmless
        from any sales, use, excise, import or export, value-added, or similar
        tax or duty, and any other tax or duty not based on the other party's
        net income ("Taxes"), and all government permit fees, license fees,
        royalty fees, customs fees or similar fees ("Fees"), levied upon any
        deliverables by such party under this Agreement or due to any payment to
        be made pursuant to this Agreement, and any penalties, interest,
        collection costs and withholding costs associated with any of the
        foregoing items ("Additional Costs"). Taxes, Fees and Additional Costs
        required to be paid by each party pursuant to this Section 6 are in
        addition to, and may not be claimed as a reduction or offset against,
        any payments due to the other party under this Agreement.

7.      DISCLAIMER OF WARRANTIES

        NEITHER PARTY MAKES ANY WARRANTIES IN THIS AGREEMENT AS TO ESS
        COMPONENT, COUNTERPARTY* COMPONENT, THE COMBINED PRODUCT, ESS IPR,
        COUNTERPARTY* IPR, TECHNOLOGY, MATERIALS, SERVICES, INFORMATION OR OTHER
        ITEMS IT FURNISHES PURSUANT TO THIS AGREEMENT, EXPRESS, IMPLIED, OR
        STATUTORY, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY
        AND FITNESS FOR A PARTICULAR PURCHASE, OR THAT SUCH ITEMS ARE FREE FROM
        THE

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        RIGHTFUL CLAIM OF ANY THIRD PARTY BY WAY OF INFRINGEMENT OR THE LIKE.

8.      REPRESENTATIONS AND WARRANTIES

        8.1 ESS REPRESENTATIONS AND WARRANTIES. ESS represents and warrants to
        Counterparty* that ESS has the corporate power, legal capacity and
        authority to enter into and perform its obligations under this Agreement
        and to consummate the transactions contemplated hereby. ESS further
        represents and warrants to Counterparty* that no approval or consent of,
        notice to, filing or registration with any third party or governmental
        agency is necessary in connection with ESS's performance of ESS's
        obligations hereunder that have not been obtained.

        8.2 COUNTERPARTY* REPRESENTATIONS AND WARRANTIES. Counterparty*
        represents and warrants to ESS that Counterparty* has the corporate
        power, legal capacity and authority to enter into and perform its
        obligations under this Agreement and to consummate the transactions
        contemplated hereby. Counterparty* further represents and warrants to
        ESS that no approval or consent of, notice to, filing or registration
        with any third party or governmental agency is necessary in connection
        with Counterparty*'s performance of Counterparty*'s obligations
        hereunder that have not been obtained.

9.      PROPRIETARY RIGHTS OWNERSHIP

        9.1 PRIOR RIGHTS. All intellectual property rights, including patents,
        patent applications, copyrights and trade secrets, owned by a party as
        of the Effective Date shall remain the property of such party and no
        licenses or other rights with respect to such intellectual property are
        granted to the other party except as expressly set forth in this
        Agreement. Without limiting the foregoing, ESS shall own all right,
        title and interest in and to the ESS Existing IPR, and Counterparty*
        shall own all right, title and interest in and to the Counterparty* IPR,
        subject only to the terms of this Agreement.

        9.2 ***. Both parties, ESS and Counterparty*, agree that the
        manufacturing kits, including but not limited to mask set of the
        Combined Products are intellectual properties of *** and are ***. *** is
        allowed to use the manufacturing kits to manufacture Combined Product
        without the approval from *** in writing.

        9.3     IMPROVEMENTS.

                9.3.1 COUNTERPARTY* IMPROVEMENTS. To the extent ESS or
                Counterparty* develops any Counterparty* Improvements, whether
                or not as a joint invention, Counterparty* shall own all
                intellectual property rights in such Counterparty* Improvements.
                ESS hereby assigns to Counterparty* all ESS's right, title and
                interest, worldwide, if any, in all intellectual property rights
                in the Counterparty* Improvements.

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                9.3.2 ESS IMPROVEMENTS. To the extent Counterparty* develops any
                ESS improvements, whether or not as a joint invention, ESS shall
                own all intellectual property rights in such ESS Improvements.
                Counterparty* hereby assigns to ESS all Counterparty's right,
                title and interest, worldwide, if any, in all intellectual
                property rights in the ESS Improvements.

10.     CONFIDENTIALITY

        10.1 CONFIDENTIALITY OBLIGATIONS. Each party acknowledges that in the
        course of the performance of this Agreement, it may obtain the
        Confidential Information of the other party. The Receiving Party (as
        defined in Section 1.7 "Confidential Information") shall at all times,
        both during the Term of this Agreement and thereafter, keep in
        confidence all of the Disclosing Party's (as defined herein)
        Confidential Information received by it. The Receiving Party shall not
        use the Confidential Information of the Disclosing Party other than as
        expressly permitted under the Terms of this Agreement or by a separate
        written agreement. The Receiving Party shall take all reasonable steps
        to prevent unauthorized disclosure or use of the Disclosing Party's
        Confidential Information and to prevent it from failing into the public
        domain or into the possession of unauthorized persons. The Receiving
        Party shall not disclose Confidential Information of the Disclosing
        Party to any person or entity other than its officers, employees and
        consultants who need access to such Confidential Information in order to
        effect the intent of this Agreement and who have entered into written
        confidentiality agreements with the Receiving Party which protects the
        Confidential Information of the Disclosing Party. The Receiving Party
        shall immediately give notice to the Disclosing Party of any
        unauthorized use or disclosure of Disclosing Party's Confidential
        Information. The Receiving Party agrees to assist the Disclosing Party
        in remedying such unauthorized use or disclosure of its Confidential
        Information. The foregoing obligations shall not apply to the extent
        that Confidential Information includes information which:

                10.1.1 is already known to the Receiving Party at the time of
                disclosure, which knowledge the Receiving Party shall have the
                burden of proving;

                10.1.2 is, or, through no act or failure to act of the Receiving
                Party, becomes publicly known;

                10.1.3 is received by the Receiving Party from a third party
                without restriction on disclosure;

                10.1.4 is independently developed by the Receiving Party without
                reference to the Confidential information of the Disclosing
                Party, which independent development the Receiving Party will
                have the burden of proving;

                10.1.5 is approved for release by written authorization of the
                Disclosing Party, or

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                10.1.6 is required to be disclosed by a government agency to
                further the objectives of this Agreement or by a proper order of
                a court of competent jurisdiction; provided, however that the
                Receiving Party will use its best efforts to minimize such
                disclosure and will consult with and assist the Disclosing Party
                in obtaining a protective order prior to such disclosure.

        10.2 Except as expressly provided herein, the Confidential Information
        disclosed, delivered to or required hereunder shall be and remain the
        sole property of the Disclosing Party. Upon the termination or
        expiration of this Agreement, and the Disclosing Party's request, the
        Receiving Party agrees to return or destroy all of the Confidential
        information of the Disclosing Party and any copies of the same promptly
        to the Disclosing Party.

11.     INDEMNIFICATION

        11.1 ESS INDEMNIFICATION. ESS shall at it's sole expense indemnify,
        defend and hold harmless Counterparty* and it's officers, directors and
        employees, against any claims, liabilities, demands, causes of action,
        judgements, settlements, and expenses (including reasonable attorneys
        fees) relating to, arising out of or resulting from (i) any breach of
        the warranties and/or representations in Section 8 hereof, or (ii)
        Counterparty*'s use of the ESS Component, ESS IPR, or ESS contributions
        to the Counterparty* Improvements.

                11.1.1 ESS's obligations hereunder are contingent upon (a)
                Counterparty* giving prompt written notice to ESS of any such
                claim, action or demand, (b) Counterparty* allowing ESS to
                control the defense and related settlement negotiations;
                provided, however, that ESS shall not enter into any agreement
                which results in any liability to Counterparty* without
                Counterparty*'s prior written consent and (c) Counterparty*
                fully assisting in the defense so long as ESS reimburses
                Counterparty* for its reasonable fees, expenses and employee
                time.

                11.1.2 ESS will have no obligation hereunder for any such
                claims, actions or demands that result from:

                        (a) Counterparty*'s use of the Combined Product in a
                        combination with materials or products not supplied by
                        ESS which violates the rights of third parties to the
                        extent that such infringement would not have arisen
                        except for such combination, or

                        (b) The modification or attempted modification of the
                        Combined Product by parties other than ESS (without
                        ESS's consent).

                11.1.3 In the event that any such claim, action or demand is
                made against Counterparty*, Counterparty* will promptly furnish
                ESS with copies of any and

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                all documents (inclusive of all correspondence and pleadings
                other than attorney-client communications) pertaining thereto.

                11.1.4 THE TOTAL MONETARY AMOUNT OF ESS'S INDEMNIFICATION TO
                COUNTERPARTY* SHALL BE LIMITED TO A MAXIMUM OF ***.

                11.1.5 THE FOREGOING STATES COUNTERPARTY*'S SOLE AND EXCLUSIVE
                REMEDY WITH RESPECT TO CLAIMS OF INFRINGEMENT OF PROPRIETARY
                RIGHTS OF ANY KIND,

        11.2 COUNTERPARTY*'S INDEMNIFICATION. Counterparty* shall at it's sole
        expense, indemnify, defend and hold harmless ESS and its officers,
        directors and employees, against any claims, liabilities, demands,
        causes of action, judgments, settlements, and expenses (including
        reasonable attorneys' fees) relating to, arising out of or resulting
        from (i) any breach of the warranties and/or representations in Section
        8 hereof, or (ii) ESS's use of the Counterparty* Component,
        Counterparty* IPR or Counterparty* contributions, to the ESS
        Improvements.

                11.2.1 Counterparty*'s obligations hereunder are contingent upon
                (a) ESS giving prompt written notice to Counterparty* of any
                such claim, action or demand, (b) ESS allowing Counterparty* to
                control the defense and related settlement negotiations;
                provided, however, that Counterparty* shall not enter into any
                agreement which results in any liability to ESS without ESS's
                prior written consent and (c) ESS fully assisting in the defense
                so long as Counterparty* reimburses ESS for its reasonable fees,
                expenses and employee time.

                11.2.2 Counterparty* will have no obligation hereunder for any
                such claims, actions or demands that result from:

                        (a) ESS's use of the Combined Product in a combination
                        with materials or products not supplied by Counterparty*
                        which violates the rights of third parties to the extent
                        that such infringement would not have arisen except for
                        such combination, or

                        (b) The modification or attempted modification of the
                        Combined Product by parties other than Counterparty*
                        (without Counterparty*'s consent).

                11.2.3 In the event that any such claim, action or demand is
                made against ESS, ESS will promptly furnish Counterparty* with
                copies of any and all documents (inclusive of all correspondence
                and pleadings other than attorney-client communications)
                pertaining thereto.

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                11.2.4 THE TOTAL MONETARY AMOUNT OF COUNTERPARTY*'S
                INDEMNIFICATION TO ESS SHALL BE LIMITED TO A MAXIMUM OF ***.

                11.2.5 THE FOREGOING STATES ESS's SOLE AND EXCLUSIVE REMEDY WITH
                RESPECT TO CLAIMS OF INFRINGEMENT OF PROPRIETARY RIGHTS OF ANY
                KIND.

12.     WAIVER OF CONSEQUENTIAL DAMAGES

        12.1 IN NO EVENT, WHETHER BASED IN CONTRACT OR TORT (INCLUDING
        NEGLIGENCE) SHALL EITHER PARTY BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL,
        INDIRECT OR SPECIAL DAMAGES OF ANY KIND OR FOR LOSS OF REVENUE, LOSS OF
        BUSINESS OR OTHER FINANCIAL LOSS ARISING OUT OF OR RELATING TO THIS
        AGREEMENT OR THE BREACH THEREOF, WHETHER OR NOT THE PARTY WAS ADVISED OF
        THE POSSIBILITY OF SUCH DAMAGE.

13.     TERM AND TERMINATION

        13.1 TERM. This Agreement will be in effect for a one (1) year period
        commencing from the Effective Date, unless terminated earlier by either
        party pursuant to the provisions in this section 13 (the "Original
        Term"). This Agreement will be automatically renewed for a successive
        one (1) year period each time(the "Additional Term" and, together with
        the Original Term, the "Term")unless either party provides written
        notice of intent to terminate at least (30) days prior to the end of
        each Term. The Exhibit A "Specifications" and the Exhibit B
        "Deliverables & Development Schedule" of the Agreement may be amended
        upon the mutual agreement of the parties in writing during the Term.

        13.2 DEFAULT BY COUNTERPARTY*. ESS has the right to terminate this
        Agreement and its further obligations hereunder upon the occurrence of
        any of the following events of default (subject to Counterparty*'s
        ability to cure or remedy such event as described in Section 13.2.3):

                13.2.1 Counterparty* is involved in any voluntary or involuntary
                bankruptcy proceeding or any other proceeding concerning
                insolvency, dissolution, cessation of operations, reorganization
                or indebtedness or the like, and the proceeding is not dismissed
                within sixty (60) days,

                13.2.2 Counterparty* becomes insolvent or unable to pay its
                debts as they mature in the ordinary course of business or makes
                an assignment for the benefit of its creditors; or

                13.2.3 Counterparty* is in material default of any provision of
                this Agreement,

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        13.3 DEFAULT BY ESS. Counterparty* has the right to terminate this
        Agreement and its further obligations hereunder upon the occurrence of
        any of the following events of default (subject to ESS's ability to cure
        or remedy such event as described in Section 13.3.3):

                13.3.1 ESS is involved in any voluntary or involuntary
                bankruptcy proceeding or any other proceeding concerning
                insolvency, dissolution, cessation of operations, reorganization
                or indebtedness or the like, and the proceeding is not dismissed
                within sixty (60) days,

                13.3.2 ESS becomes insolvent or unable to pay its debts as they
                mature in the ordinary course of business or makes an assignment
                for the benefit of its creditors; or

                13.3.3 ESS is in material default of any provision of this
                Agreement,

        13.4 RIGHT TO CURE EVENT OF DEFAULT. Upon the occurrence of any event of
        default entitling a party to terminate this Agreement, the
        non-defaulting party may send notice of termination, specifying the
        nature of the default, to the other party. The non-defaulting party will
        permit thirty (30) days following the date of such notice to enable the
        other party to cure the default. Failure to cure the default will result
        in termination without further notice by the non-defaulting party,
        unless such non-defaulting party extends the cure period by written
        notice or withdraws the default notice.

        13.5 EFFECT OF TERMINATION. Upon termination or expiration of this
        Agreement:

                13.5.1 All rights and licenses granted hereunder shall terminate
                immediately; provided, however, that each party may sell its
                inventory of the Combined Product in existence on the
                termination date.

                13.5.2 All sublicense agreements entered into pursuant to this
                Agreement shall terminate immediately.

        13.6 SURVIVAL. The termination or expiration of this Agreement shall in
        no way relieve either party from its obligations to pay the other any
        sums accrued hereunder prior to such termination. The parties agree that
        their respective rights, obligations and duties under Section 4.7
        ("Profit Sharing"); Section 5 ("Accounting; Audit; Payment"), Section 7
        ("Disclaimer of Warranties"), Section 9 ("Propriety Rights Ownership"),
        Section 10 ("Confidentiality"), Section 11 ("Indemnification"), Section
        13 ("Term and Termination") and Section 14 ("General Provisions") of
        this Agreement shall survive any termination or expiration of this
        Agreement.

14.     GENERAL PROVISIONS

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        14.1 NOTICE. Any notice provided for or permitted under this Agreement
        will be treated as having been given when (a) delivered personally, (b)
        sent by confirmed telex or telecopy, (c) sent by commercial overnight
        courier with written verification of receipt (d) mailed postage prepaid
        by certified or registered mail, return receipt requested, to the party
        to be notified, at the addresses set forth below, or at such other place
        of which the other party has been notified in accordance with the
        provisions of this Section 14.

        If to ESS:           ESS Technology, Inc.
                             48401 Fremont Blvd.,
                             Fremont, California 94538
                             Attn:

        If to Counterparty*: ***
                             ***
                             ***
                             ***

        Such notice will be treated as having been received upon the earlier of
        actual receipt or five (5) days after posting.

        14.2 NO MODIFICATION WAIVER. The terms of this Agreement shall not be
        modified except by an agreement in writing signed by both parties
        hereto. No waiver by either party of a breach or default hereunder shall
        be deemed a waiver by such party of a subsequent breach or default of a
        like or similar nature.

        14.3 ENTIRE-AGREEMENT. This Agreement, including Exhibits, shall
        constitute the entire understanding of the parties with respect to the
        subject matter, superseding all prior and contemporaneous promises,
        agreements and understandings, whether written or oral pertaining
        thereto.

        14.4 RELATIONSHIP OF THE PARTIES. This Agreement does not appoint either
        party as the agent of the other party, or create a partnership of joint
        venture between the parties.

        14.5 GOVERNING-LAW. This Agreement shall be construed and interpreted
        pursuant to the laws of the State of California, and the parties hereto
        submit and consent to the jurisdiction of the courts of the State of
        California, excluding its choice of law provisions.

        14.6 SEVERABILITY. In the event that any provision of this Agreement
        shall be unenforceable or invalid under any applicable law or be so held
        by applicable court decision, such unenforceability or invalidity shall
        not render this Agreement unenforceable or invalid as a whole, and, in
        such event, such provision shall be changed and interpreted so as to
        best accomplish the objectives of such unenforceable or invalid
        provision within the limits of applicable law or applicable court
        decisions.

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        14.7 COUNTERPARTS. This Agreement may be executed in any number of
        counterparts; each of which shall be deemed to be an original and all of
        which together shall be deemed to be one and the same Agreement.

        14.8 FURTHER ASSURANCES. The parties hereto shall execute such further
        documents and perform such further acts as may be necessary to comply
        with the Terms of this Agreement and consummate the transactions herein
        provided.

        14.9 ATTORNEY'S FEES. If any legal action or any other proceeding is
        brought for the enforcement of this Agreement, or if a dispute arises
        under this Agreement, the successful or prevailing party shall be
        entitled to recover reasonable attorneys' fees and other costs incurred
        in that action or proceeding, in addition to any other relief to which
        it may be entitled.

        14.10 HEADINGS. The headings contained in this Agreement are for
        convenience and reference purposes only. They do not form a part hereof
        and shall not affect the meaning or interpretation of this Agreement.

        14.11 ASSIGNMENT. Except as provided in this Agreement and in the event
        of acquisition, neither party may assign any of its rights hereunder
        (whether voluntarily, involuntarily, by operation of law or otherwise)
        unless it has obtained the prior written consent of the other party to
        the assignment of such rights. Except as provided in this Agreement and
        in the event of acquisition, neither party may delegate any of its
        obligations hereunder (whether voluntarily, involuntarily, by operation
        of law or otherwise) unless it has obtained the prior written consent of
        the other party to the delegation of such obligations. Any purported
        assignment or delegation by either party of any rights or obligations
        hereunder without the other parties prior written approval shall be void
        and of no further force and effect.

        14.12 EQUITABLE REMEDIES. Each party acknowledges that its failure to
        perform any of the material terms or conditions of this Agreement shall
        result in immediate and irreparable damage. The Parties also acknowledge
        that there may be no adequate remedy at law for such failures and that
        in the event thereof, each party shall be entitled to equitable relief
        in the nature of an injunction and to all other available relief, at law
        or in equity.

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        IN WITNESS WHEREOF, the parties have caused this Agreement to be as of
        the Effective Date.

        ESS TECHNOLOGY INC.                 ***

        By: /s/ Fred S. L. Chan             By:  /s/ ***
           -------------------------           -----------------------------
           Authorized Representative           Authorized Representative

        Name:  Fred S. L. Chan              Name: ***

        Title: Chairman                     Title: President

        Date: 12/14/2001                    Date: 12/14/2001

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        Exhibit A     Specifications

        Exhibit B     Deliverables & Development Schedule

        Exhibit C     Profit Sharing

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                                    EXHIBIT A

                                 SPECIFICATIONS

        ***


        1.      CLASSIFICATION OF THE ***

                *** can be classified into two major categories, one with Basic
                Features while the other with Advanced Features. The Basic
                Features and Advanced Features shall be mutually acceptable by
                both Parties in writing and can be updated by both Parties from
                time to time in writing during the Term of this Agreement.

        2.      FEATURES OF EACH OF ***

                This section lists the Basic Features, Advanced features of ***.

                The product specification is defined in EXHIBITION A.  All the
                products with one of the following features are defined as ***
                with Advanced Features :
                1. ***
                2. ***
                3. ***
                4. ***

                All the products which are not ***s with Advanced Features are
                defined as *** with Basic features.

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                                    EXHIBIT B

        1.      COUNTERPARTY* DELIVERABLES

<TABLE>
        <S>                        <C>                      <C>
        -------------------------- ------------------------ --------------------
        Item                       Deliverables             Due Date
        -------------------------- ------------------------ --------------------

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

        -------------------------- ------------------------ --------------------
</TABLE>


        2.    ESS DELIVERABLES

<TABLE>
        <S>                        <C>                      <C>
        -------------------------- ------------------------ --------------------
        Item                       Deliverables             Due Date
        -------------------------- ------------------------ --------------------

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

        -------------------------- ------------------------ --------------------
</TABLE>

        3.      Development Schedule

                Project                                  Target Completion Date

                1.     Tape out

                2.     Demonstration

                3.     Production


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                                    EXHIBIT C

                                 PROFIT SHARING

        1.      DEFINITIONS

                1.1     "Combined Product B" shall mean Combined Product with
                        Basic Features.

                1.2     Combined Product A" shall mean Combined Product with
                        Advanced Features.

                1.3     "Combined Product Price B" means the average selling
                        price of Combined Product B sold.

                1.4     "Combined Product Price A" means the average selling
                        price of Combined Product A sold.

                1.5     "Combined Product Cost" shall mean ***.

                1.6     "Extra Die Cost" shall mean extra cost of each die due
                        to Advanced Features.

                1.7     "Extra Testing Cost" shall mean extra testing cost due
                        to Advanced Features.

                1.8     "Extra Sales Cost" = ***

                1.9     "Total Extra Cost" = ***

        2.      PROFIT SHARING OF PRODUCT B

                The Profit of each Combined Product B will be shared with the
                following equations:

                ***

        3.      PROFIT SHARING OF PRODUCT A

                The Profit of each Combined Product A will be shared with the
                following equations:

                ***

        4.      PRICING OF COMBINED PRODUCT B

                ***

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                                      -19-