**EXHIBIT 10.37******Certain confidential information contained in this document, marked by brackets, has beenomitted and filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of theSecurities Exchange Act of 1934, as amended.ESS-SILAN DVD TECHNOLOGY LICENSE AGREEMENTTHIS LICENSE AGREEMENT (the “Agreement”), effective as of November 3, 2006 (the “Effective Date”),is entered into by and between ESS Technology, Inc., a California corporation having its principalplace of business at 48401 Fremont Blvd., Fremont, California 94538, U.S.A. (“ESS”), and HangzhouSilan Microelectronics Co., Ltd., having its principal place of business at No. 4 Huang Gu ShanRoad, Post Code 310012, Hang-Zhou, P.R. China (“Silan”).RECITALS     WHEREAS the parties desire that Silan license, distribute and sell DVD products incorporatingcertain ESS technology.     WHEREAS the parties desire that Silan obtain from ESS the right to use certain ESS technologyfor the following purposes; the parties desire that Silan be authorized to distribute and sell DVDproducts incorporating certain ESS technology; and the parties desire that ESS authorizes Silan touse the DVD technology to do research, development and sell Silan’s own products.     WHEREAS this Agreement is subject to the approval of the ESS Board of Directors and thesignature pages shall not be deemed delivered by the parties and this Agreement shall not bebinding on the parties until such Board approval has been obtained and ESS has released theparties’ respective executed signature pages from escrow and delivered them to Silan following suchBoard approval (such Board approval is referred to herein as the “Condition Precedent” andis anticipated to occur on or about November 3, 2006).AGREEMENT     NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, thesufficiency of which is acknowledged by the parties, the parties agree as follows (subject to theCondition Precedent):1. **Definitions** 1.1 “ESS DVD Technology” means all hardware and software intellectual property in DVD productsowned by ESS. Hardware intellectual properties include ESS design methodology, chiparchitecture, and functional blocks, including but not limited to Servo,Video encoder, MPEG1/2/4 decoder, USB, JPEG, CPU, DSP, PWM, Audio DAC, Video DAC, etc.Software intellectual properties include but are not limited to firmware in CPU 1
 

 
  and DSP, application software, GUI, OSD, etc. ESS DVD Technology deliverables are as per Exhibit3. 1.2 “Standard DVD Player” means a desktop/portable DVD player, mini-combo DVD player or DVD hometheater system that uses an optical drive during operation and includes some or all of thefollowing features: 2 or more channels of audio output, 1 or more channels of video output in480i/p (standard definition) resolution, MPEG 1, 2 or 4 decoding, USB 2.0 full speed host,upscale 480i/p to 1080i resolution, HD JPEG up to 1080i resolution, and the option tointerface to external HDMI transmitter and memory cards. “Standard DVD Player” does notinclude SACD DVD players or automotive DVD players. 1.3 “ESS Servo Technology” means the ESS servo processor owned by ESS interfacing with laseroptical pickup and disc/tracking motor drive(s) to provide data stream(s) to backendprocessing circuitry. It includes all related hardware and software intellectual propertiesand ESS source code owned by ESS and embedded in Phoenix 2 and LMX 2 database. 1.4 “ESS DVD Navigation Technology” means ESS navigation source code owned by ESS and embedded inthe ESS reference DVD platform for Phoenix 2 and LMX 2. 1.5 “Phoenix 2 Data Base” means documentation, algorithms, source codes and files in RTL,simulation, layout, and test patterns, as well as a chip development environment (i.e. FPGAboard, schematics and layout files) and chip validation environment (i.e. test and systemlevel board schematics and layout files). Exhibit 1 lists the Phoenix 2 features set, all ofwhich is included within the “Phoenix 2 Data Base.” The Phoenix 2 Data Base shall not includeESS’s CSS keys and ESS’s CPPM/CPRM keys. 1.6 “LMX 2 Data Base” means documentation, algorithms, source codes and files in RTL, simulation,layout, and test patterns, as well as a chip development environment (i.e. FPGA board,schematics and layout files) and chip validation environment (i.e. test and system level boardschematics and layout files). Exhibit 2 lists the LMX 2 features set, all of which is includedin within the “LMX 2 Data Base.” The LMX 2 Data Base shall not include ESS’s CSS keys andESS’s CPPM/CPRM keys. 1.7 “Licensed Technology” means ESS DVD Technology, ESS Servo Technology, ESS DVD NavigationTechnology, Phoenix 2 Data Base, and LMX 2 Data Base, collectively, as well as anyconfidential information provided to Silan under the Agreement. 1.8 “Silan’s Gross Margin” means the gross selling price of the chip excluding applicable taxes,less all actual costs of: semiconductor silicon either in die or wafer form, packaging costs,testing fees, sales expense (such sales expenses shall not exceed 8% of gross selling price ofthe chip, excluding applicable taxes or actual expenses whichever is less), and any futurepossible licensing unit cost. The licensing unit cost must be imposed industry-wide and due tono fault of Silan. All such licensing unit cost(s) must have prior written approval from ESSwithin thirty days upon written notification from Silan. If ESS does not response withinthirty days, Silan shall proceed and treat as an agreement from ESS. 1.9 “ESS’s Cost” means all actual costs of: semiconductor silicon either in die or wafer form,packaging costs, testing fees, and manufacturing overhead, but in no event shall the total ofmanufacturing overhead costs exceed USD 0.17. 1.10 “Phoenix 2 Product” means an integrated circuit that contains both ESS Servo and ESS MPEGcircuitry from Phoenix 2 Data Base. The features set of a Phoenix 2 Product are in accordancewith Exhibit 1. 2
 

 
1.11 “LMX 2 Product” means an integrated circuit that contains both ESS Servo and ESS MPEGcircuitry from LMX 2 Data Base. The features set of an LMX 2 Product are in accordance withExhibit 2. 1.12 “Phoenix 2 Derivative Product” means products developed, designed, produced and sold usingESS’s Phoenix 2 Data Base. A Phoenix 2 Derivative Product must include ESS’s servo circuitryor ESS’s MPEG decoder circuitry. 1.13 “LMX 2 Derivative Product” means products developed, designed, produced and sold using ESS’sLMX 2 Data Base. An LMX 2 Derivative Product must include ESS’s servo circuitry or ESS’s MPEGdecoder circuitry. 1.14 “Proven Functionality” means that if a chip is installed in a test validation board, astandard DVD video disc can be played to video and audio content outputs withoutinterruptions. A Focus Ion Beam (FIB) can be used to verify functionality. 1.15 “Design Win” means receipt of first customer purchase order with 500 units or more of Phoenix2 Products or LMX 2 Products. 1.16 “DVD Related Products” means products that include DVD servo. 2. **Grant of Licenses**2.1 Pursuant to the terms and conditions herein, ESS hereby grants to Silan a permanent,irrevocable, non-exclusive, non-sublicensable, worldwide, non-transferable, royalty-bearing licenseto design, develop, manufacture, have manufactured, make, have made, use, include in downstreamproducts, sell or otherwise distribute products using ESS DVD Technology, ESS Servo Technology, andESS Navigation Technology.2.2 Pursuant to the terms and conditions herein, ESS hereby grants to Silan a permanent,irrevocable, exclusive, non-sublicensable, worldwide, non-transferable, royalty-bearing license todesign, develop, manufacture, have manufactured, make, have made, use, include in downstreamproducts, sell or otherwise distribute products using Phoenix 2 Data Base and LMX 2 Data Base.Phoenix 2 Products and LMX 2 Products shall only be sold for, distributed into, or used in StandardDVD Player applications.2.3 ESS shall not license the ESS Servo Technology and ESS Navigation Technology to any third partyfor four years from the Effective Date for Standard DVD Player applications.2.4 ESS hereby grants to Silan a non-exclusive, non-sublicensable, non-transferable, andterritory-limited distribution license to sell the ESS Phoenix U (currently produced at GSMC)integrated circuit to customers in Greater China (China, Hong Kong, Macau, and Taiwan) only forStandard DVD Player applications, and not for automotive DVD player applications. ESS shall chargeSilan [****] per unit. 2.4.1 The parties understand and agree that ESS shall continue to market, distributeand sell the Phoenix revision U (currently being produced at GSMC) and Phoenix revisionW (currently being produced at SMIC) integrated circuits, and that Silanshall use its best efforts to transition all customers to Phoenix 2 Product, LMX 2Product, Phoenix 2 Derivative Product or LMX 2 Derivative Product. **** Confidential Treatment Requested. 3
 

 
 2.4.2 ESS agrees to use commercially reasonable efforts to transition its existing customers tothe Phoenix 2 Product, LMX 2 Product, Phoenix 2 Derivative Product or LMX 2 Derivative Product.However, the parties understand and agree that ESS expressly retains the right to continuemarketing and selling ESS Phoenix revision U (currently being produced at GSMC), Phoenixrevision W (currently being produced at SMIC), Vibrato II, Phoenix Pro and Vibratto Sintegrated circuits to customers who do not or cannot transition to the Phoenix 2 Product, LMX2 Product, Phoenix 2 Derivative Product or LMX 2 Derivative Product.2.5 Until Silan obtains all necessary third-party licenses and begins production of Phoenix 2Product, ESS hereby grants to Silan an exclusive, non-sublicensable, non-transferable,royalty-bearing and worldwide distribution license to sell the ESS Phoenix 2 Product (currentlybeing produced at GSMC) integrated circuit to customers for Standard DVD Player applications. ESSshall charge Silan ESS’s Cost, and Silan shall pay royalties on its per-unit sales as per Section5.3i. ESS will sell through Silan as an exclusive distributor and ESS shall not sell directly tocustomers for such Standard DVD Player applications. After Silan obtains all necessary licenses andproduces Phoenix 2 Product, ESS will work together with Silan to attempt to transition customers toSilan’s Phoenix 2 Product.2.6 For clarity, the parties understand and agree that ESS retains the right to grant licenses tothird parties for ESS DVD Technology for applications other than Standard DVD Player applications.The parties also understand and agree that ESS retains the right to design, develop, manufacture,have manufactured, make, have made, use, include in downstream products, sell or otherwisedistribute all the Licensed Technology in applications, products or markets other than Standard DVDPlayer applications. Subject to Section 2.2 above, the parties also understand and agree that ESSgrants Silan the right permanently and irrevocably to design, develop, manufacture, havemanufactured, make, have made, use, include in downstream products, sell or otherwise distributeany products using Licensed Technology and ESS grants Silan the right permanently and irrevocablyto use, modify, improve, and enhance the Licensed Technology.2.7 Silan expressly acknowledges and agrees that none of the licenses granted to it under thisAgreement, including those granted in Sections 2.1, 2.2, 2.3, 2.4, and 2.5, is sublicensable.Silan shall not be permitted to and cannot grant to any third party or successor in interest alicense to make, use, import, offer for sale, or sell any integrated circuits or products using orincorporating all or any part of the Licensed Technology, or all or any part of a Phoenix 2Derivative Product or LMX 2 Derivative Product.2.8 ESS agrees that for a period of three years from the Effective Date, it shall not release anynew integrated circuits for Standard DVD Player applications.2.9 In consideration of the licenses granted herein, Silan shall pay to ESS a total of USD3,750,000 in initial license fees, to be paid as follows: i. [****] on within 5 days from Effective Date. **** Confidential Treatment Requested. 4
 

 
 ii. [****] each month for 4 months on the first day of each month after EffectiveDate  iii. [****] on the first to occur of (a) one calendar year after the Effective Dateor (b) Proven Functionality of the Phoenix 2 Product  iv. [****] on the first to occur of (a) one calendar year after the Effective Dateor (b) Proven Functionality of the LMX 2 Product     In consideration of the urgency of the first and second payments, the required documents ofthese two payments shall not be limited to item 2.9. ESS agrees that Silan shall provide therequired documents to ESS as early as possible.Both parties agree that if the project requires additional development cost, the payment is asfollows: v. [****] each month for 2 months if Silanapproves to continue Phoenix 2and LMX 2 development and the total of such development cost is under [****], bothparties will pay equally. Silan will pay 100% of all development costs in excess of[****].     All license fees are subject to China income tax in accordance with China law. After receiptof ESS invoice(s) (the total amount including income tax) as per payment schedule above, Silanshall withhold, deduct, and pay the appropriate income tax before making license fee payment toESS. Silan will send license fee income tax statement receipt to ESS within 5 business days afterpayment.2.10 Silan agrees that all technology licensed to it under this Agreement, and all derivatives anddownstream products thereof, cannot be marketed or sold under the ESS brand name, nor shall Silanrefer to ESS in any manner without prior written permission.2.11 Silan agrees that it will obtain its own licenses to the CSS keys for the Phoenix 2, LMX 2and all derivative products as soon as possible, but in no event longer than six months from theEffective Date of this Agreement. Silan shall not begin production of the LMX 2 product or anyderivative version of the Phoenix 2 and LMX 2 products unless it uses Silan’s own CSS keys in thoseproducts. When Silan begins manufacturing using Silan CSS keys on Phoenix 2 and/or LMX 2 products,ESS shall begin transition plans made by both parties and to stop manufacturing ESS Phoenix 2and/or ESS LMX 2 products, upon Silan’s request.3. **Development Cost**3.1 For development of the Phoenix 2 and LMX 2 products, Silan shall pay directly to ESS or tothird party engineering and fabrication companies all costs incurred in the development of thePhoenix 2 and LMX 2 products, including but not limited to all mask charges, packaging andengineering wafer lots, all development and test boards, all further engineering costs and expensesincurred by ESS, and all wafer, fabrication and packaging expenses. All such costs must have priorwritten approval from Silan. **** Confidential Treatment Requested. 5
 

 
3.2 The parties contemplate that following the Effective Date of this Agreement, ESS shall provideSilan with the opportunity to hire current ESS employees who are currently employed by ESS and whohave specializations in ESS’s DVD line of business. No such employee shall be obligated to joinSilan, but Silan and ESS shall work together to persuade such employees to accept employment withSilan.4. **Ownership**4.1 Silan acknowledges that as between the parties, ESS shall retain all rights, title and interestin and to the Licensed Technology.4.2 To the extent that Silan develops derivative works based upon the Licensed Technology, Silanshall own all right, title, and interest in and to such derivative works, including, withoutlimitation, all patent rights and copyrights in works derived from the Licensed Technology.5. **Royalties**5.1 Silan shall pay the following sums to ESS as royalties on the licenses granted above. Allroyalties shall be due and payable as soon as practical, but no more than twenty business daysafter each calendar quarter in US Dollars, and shall be made by wire transfer to such bank accountas ESS shall designate. Each royalty payment shall be accompanied by a royalty report listing theidentity and quantity of all units sold, and calculating the total royalties owed to ESS5.2 Silan’s payment to ESS shall have a maximum royalty fee of USD 20,000,000, at which point thelicenses granted herein shall become fully paid-up with no further royalties owed. At such time,ESS shall have no further obligation to indemnify Silan pursuant to Section 8.2 of this Agreement.5.3 Per unit royalties shall be calculated as follows:(i) For Phoenix 2 Products, including minor upgraded Phoenix 2 Products and upgraded Phoenix 2Products: a. For three years after Effective Date , the lesser of [****] of Silan’s GrossMargin for each unit sold, unless Section 5.3.i.b is satisfied.  b. If Phoenix 2 Products do not achieve a Design Win within two years after theEffective Date, the royalty shall be reduced to the lesser of [****] of Silan’s GrossMargin for each unit sold  c. After three years from the Effective Date and for the next three years, thelesser of [****] of Silan’s Gross Margin for each unit sold.(ii) For LMX 2 Products and any DVD Related Products developed by Silan: a. For six and one half years after the Effective Date, the lesser of [****] ofSilan’s Gross Margin for each unit sold, unless Section 5.3.ii.b is satisfied.  b. If LMX 2 Products do not achieve a Design Win within two and one half yearsafter the Effective Date, the royalty shall be reduced to the lesser of [****] ofSilan’s Gross Margin for each unit sold. **** Confidential Treatment Requested. 6
 

 
(iii) For any products without embedded DVD servo developed by Silan that include ESS’s MPEGdecoder: a. For six and one half years after Effective Date, the lesser of [****] ofSilan’s Gross Margin for each unit sold.5.4 Upon the first to occur of (a) Silan’s payment to ESS reaches a cumulative total royalty fee ofUSD 20,000,000, or (b) six and one half years after the Effective Date (and Silan has paid alloutstanding royalties due), the licenses granted in this Agreement shall be fully paid-up and shallbecome royalty-free, and ESS’s obligation to indemnify Silan pursuant to Section 8.2 shall alsocease. For clarity, Silan shall pay royalties to ESS for products explicitly listed in Section 5.3when Silan develops, designs, manufactures, distributes and sells products incorporating ESSLicensed Technology; Other products that Silan develops, designs, manufactures, distributes andsells using ESS Licensed Technology , without ESS Servo or ESS MPEG, are and shall remain royaltyfree.5.5 Silan agrees that it shall keep complete and accurate records and books of accounts relating tothe manufacture, distribution and sale of integrated circuits and products using or incorporatingall or any part of the Licensed Technology, and that it shall retain such books and records for aperiod of three (3) years after the transactions to which they relate (but not exceeding one (1)year after any termination of this Agreement). Upon giving Silan thirty (30) business days priorwritten notice, ESS shall have the right to, at ESS’s expense and through an independent certifiedpublic accountant acceptable who signs an appropriate confidentiality agreement with Silan, duringregular business hours, inspect, examine, audit, and make abstracts of all such records and booksinsofar as they relate to the determination of Silan’s royalty obligations and insofar as may benecessary to verify the accuracy of the same and of the royalty reports provided for herein. If adiscrepancy of greater than 5% is discovered during this audit, Silan shall be responsible for thecost of the audit.5.6 As soon as practical, ESS shall deliver all technical information relating to the LicensedTechnology (including data, files, etc.) to Silan. Such technical information shall include, butnot limited to, GDSII, RTL, software source code, design verification file(s), test file(s), designmanual(s), user manual(s), silicon development platform, application development platform, tuningtool(s), compiler, emulator and any patent(s), software copyright(s), and IC schematics related tothe Licensed Technology. All ESS’s deliverables and schedule are as per Exhibit 3.5.7 After Effective Date, Silan shall send 5 or more engineers to ESS HQ to transfer the LicenseTechnology including but not restricted in data material (database), to consult with ESS engineerson the Licensed Technology, to participate in the LMX2 design and tapeout, PHXII and LMXII sampletests. During the sample test, ESS shall provide Silan engineers the corresponding test plan, testresults, problems and related solutions. ESS shall provide the working environment and thenecessary people to support Silan and smoothly transfer the Licensed Technology. **** Confidential Treatment Requested. 7
 

 
5.8 If there are problems during product application and upgrades, ESS will, with best efforts,provide Silan with engineering resources and recommend possible solution(s), including on-siteguidance, written instruction(s), telephone instruction(s) or providing more detailed dataand document(s).5.9 Both parties shall keep copies of the delivered Licensed Technology and keep strict revisionand document control.5.10 All royalty fees are subject to China income tax in accordance with China law. Silan shallwithhold, deduct, and pay the appropriate income tax before making royalty fee payment to ESS.Silan will send royalty fee income tax statement receipt to ESS within 5 working days afterpayment. After receipt of each royalty payment as per quarterly royalty report from Silan, ESS willsend invoice (the total amount including income tax) to Silan within five business days.5.11 Both parties of this Agreement confirm the following contact persons:         i. engineering related matters:         ESS        Contact: [****]    Address: 48401 Fremont Blvd., Fremont, CA 94538 USA    FAX: [****]    Email: [****]    Telephone: [****]  Silan        Contact: [****]    Address: No. 4, Huang Gu Shan Road, Hangzhou, P.R. China 310012    FAX: [****]    Email: [****]    Telephone: [****]         ii. sales and marketing related matters:         ESS        Contact: [****]    Address: 48401 Fremont Blvd., Fremont, CA 94538 USA    FAX: [****]    Email: [****]    Telephone: [****]  Silan        Contact: [****]    Address: Rm 2003, Cyber Times Towers A, Tianan Cyber Park Futian District, Shenzhen,P.R. China 518041    FAX: [****]    Email: [****] **** Confidential Treatment Requested. 8
 

 
     Telephone: [****]For any changes regarding to the above information, written notification must be made to the otherparty within 5 business days.6. **Term and Termination**6.1 This Agreement shall become effective as of the Effective Date and shall remain in full forceand effect until both Parties agree in writing to terminate the agreement, or until terminated byeither party pursuant to this Section 6.6.2 Either party, in addition to other remedies that it may have, may at its election terminatethis Agreement, effective upon written notice to the other party, in the event any of the followingactions or events is committed by the other party or occurs: (a) a default or breach by the otherparty of any of its material obligations under this Agreement which default or breach remainsuncured thirty (30) days after the non-breaching party gives written notice thereof; (b) the otherparty’s adjudicated bankruptcy, becoming insolvent or entering dissolution or liquidationproceedings; or (c) a petition filed by or against such other party under bankruptcy law of thenature of Chapter 7 of the United States Bankruptcy Code, under corporate reorganization law orunder any other law for the relief of debtors, which is consented to or is not dismissed withinsixty (60) days of filing.6.3 Upon termination of this Agreement, all licenses and rights granted under this Agreement shallcease forthwith, and the parties shall destroy all Confidential Information (as defined below)furnished hereunder as well as all copies thereof. Notwithstanding the foregoing, the licenses andrights granted under this Agreement shall continue for up to six months to allow Silan to sell itsexisting inventory.7. **Confidentiality**7.1 For the purpose of this Agreement, “Confidential Information” of one party means anyinformation which is disclosed hereunder by such party to the other in tangible material marked asconfidential, or which is disclosed hereunder by such party to the other orally or in otherintangible form and designated as confidential at the time of such disclosure and is reduced towriting conspicuously marked as confidential and sent to such other party within thirty (30) daysafter such disclosure. For a period of five (5) years after disclosure hereunder, the receivingparty of Confidential Information of the other agrees to keep such Confidential Information inconfidence with at least the same degree of care which it uses to prevent the disclosure of its ownconfidential information of like importance, but in no event with less than reasonable care. Thereceiving party may disclose the other party’s Confidential Information to its employees to theextent reasonably necessary for the purpose of this Agreement and provided the employees to whichConfidential Information is disclosed are bound by use and disclosure restrictions at least asprotective of such Confidential Information as those restrictions set forth herein. No otherdisclosure of Confidential Information shall be permitted without the prior written consent of theother party. **** Confidential Treatment Requested. 9
 

 
7.2 The restrictions on use and disclosure of Confidential Information as described above shall notapply to any information which: a. is or becomes available to the public through no fault of the receiving party;  b. is legitimately obtained by the receiving party from a third party without anyconfidentiality obligation; or  c. is at any time developed by the receiving party independently.7.3 Notwithstanding Section 7.1 above, either party may disclose the other’s ConfidentialInformation if required by applicable laws, or by a court, administrative agency, or othergovernmental body; provided, however, that the receiving party shall provide prompt and sufficientadvance written notice thereof to the disclosing party so that the disclosing party may seek aprotective order (or its equivalent) with respect to such disclosure, which the receiving partyshall fully comply with.7.4 If either party elects to make a public announcement on this Agreement, both parties will worktogether on the message and content, and coordinate on the timing of the announcement. Theannouncing party must consider suggestions on the message and content from the other party beforemaking an announcement.8. **Indemnification**8.1 Silan will defend, indemnify and hold harmless ESS, its directors, officers, employeesand/or agents from and against any and all claims, damages, losses and expenses, including courtcosts and reasonable fees and expenses of attorneys, expert witnesses, and other professionals,arising out of or resulting from any action by a third party against ESS that is based on Silan’suse, control, distribution or disposition of the Licensed Technology (including but not limited toany alleged misuse of the CSS keys provided by DVD CCA to ESS or Silan contained in certain of theLicensed Technology, and including but not limited to any alleged misuse of any other requiredlicense as defined in Section 9.6 of this Agreement), based upon Silan’s breach of any obligation,warranty or representation in this Agreement, or based on Silan’s distribution of any product underthe licenses granted in Section 2, including any claim of breach of a third-party license arisingtherefrom. Silan’s obligation to indemnify ESS as set forth above will be conditioned on ESSpromptly (i) notifying Silan of the existence of such a claim, (ii) tendering sole control of thedefense and settlement of such claim to Silan, and (iii) cooperating as reasonably requested bySilan. ESS may participate in such defense at its own expense and with its own counsel.8.2 ESS shall indemnify Silan and hold it harmless, and, at Silan’s option, defend Silan from andagainst all claims, damages, losses and expenses, including court costs and reasonable fees andexpenses of attorneys, expert witnesses, and other professionals, arising out of or resulting from(i) any breach of this Agreement or of any of the warranties or representations made by ESS herein,or (ii) any action by a third party against Silan that is based on any claim that the portions ofthe Licensed Technology as delivered by ESS infringe a patent, copyright, or any other proprietaryright, or violate a third party’s trade secret rights, except to the extent that the foregoingresults from compliance with specifications provided by Silan, and except to the extent that theforegoing results from the combination of the ESS portions of the Licensed Technology 10
 

 
with software or equipment not provided by ESS. ESS’ obligation to indemnify Silan as setforth above will be conditioned on Silan promptly (i) notifying ESS of the existence of such aclaim, and (ii) cooperating as reasonably requested by ESS. The indemnification obligationdescribed in this Section 8.2 shall cease when Silan ceases paying royalties to ESS pursuant toSection 5.2 or Section 5.4 of this Agreement. .8.3 SILAN UNDERSTANDS AND ACKNOWLEDGES THAT THE LICENSED TECHNOLOGY IS PROVIDED AS IS. EXCEPT ASSPECIFICALLY SET FORTH HEREIN, NO OTHER WARRANTIES OR REPRESENTATIONS, EITHER EXPRESSED OR IMPLIED,ARISING BY LAW OR OTHERWISE, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY ANDFITNESS FOR A PARTICULAR PURPOSE, ARE GIVEN BY ESS UNDER THIS AGREEMENT, including but not limitedto, any warranty or representation: (a) as to the validity of any patent; (b) that any manufacture,importation, sale, lease, use, or other disposition of products will be free from infringement of athird party’s intellectual property rights; (c) that ESS will enforce any intellectual propertyrights it may have against third parties; or (d) as to the quality, merchantability, or fitness fora particular purpose of any product.8.4 BOTH PARTIES UNDERSTAND AND ACKNOWLEDGE THAT NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTYFOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATEDREVENUES OR PROFITS RELATING TO THE SAME), ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THELICENSED TECHNOLOGY, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OROTHERWISE, EVEN IF EITHER PARTY IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME.9. **Warranties and Representations**9.1 As of the Effective Date, each party represents and warrants to the other party that it (i) isa corporation duly organized, validly existing and in good standing under the laws of thejurisdiction in which it is incorporated, and (ii) has full corporate power and authority and thelegal right to own and operate its property and assets and to carry on its business as it is nowbeing conducted and is contemplated in this Agreement, including, without limitation, the right togrant the licenses granted hereunder.9.2 As of the Effective Date, each party represents and warrants to the other party that it (i) hasthe corporate power and authority and the legal right to enter into this Agreement and perform itsobligations hereunder; (ii) has taken all necessary corporate action on its part required toauthorize the execution and delivery of this Agreement and the performance of its obligationshereunder; and (iii) this Agreement has been duly executed and delivered on behalf of such party,and constitutes a legal, valid and binding obligation of such party and is enforceable against itin accordance with its terms.9.3 Except as otherwise described in this Agreement, each party represents and warrants to theother party that all necessary consents, approvals and authorizations of all governmentalauthorities and other persons or entities required to be obtained by such party in connection withentry into this Agreement have been obtained. 11
 

 
9.4 Each party represents and warrants to the other party that the execution and delivery of thisAgreement by such party and the performance of such party’s obligations hereunder (i) do notconflict with or violate any requirement of any applicable law or regulation or any provision ofthe Articles or Certificate of Incorporation or Bylaws of such party in any material way, and (ii)do not conflict with, violate or breach or constitute a default or require any consent under, anycontractual obligation or court or administrative order by which such party is bound.9.5 ESS represents and warrants that all the technologies contained in the technical informationthat is delivered to Silan by ESS are owned by ESS; ESS owns or controls all right, title andinterest in and to the Licensed Technology, the ESS brand name, and the ESS trademarks; and thatESS has the power to grant the licenses related to and within this Agreement.9.6 Silan represents and warrants that as of the Effective Date, it shall immediately obtain andmaintain in good standing during the term of this Agreement all necessary third-party licenses forthe design, development, manufacture, import, distribution, marketing and sale of Standard DVDPlayer products, including but not limited to licenses from DVD CCA, Macrovision, Dolby, DTS, HDCP,DivX, WMA, Nero, CPPM, DRM, Memory Stick, and SD.9.7 Silan cannot have access to ESS’s CSS keys under any circumstances. ESS shall manufacture thePhoenix U and the Phoenix 2 until Silan tapes out its own version with its own keys.10. **Non-Assignment**Neither party shall assign any of its rights or obligations under this Agreement without the priorwritten consent of the other party; provided, however, that either party may assign this Agreementwithout consent to a successor-in-interest upon a merger, acquisition or sale of all orsubstantially all of that party’s assets on condition that the assignee of this Agreement willundertake by operation of law or has agreed in writing submitted to the other party, to assume allobligations and liabilities of the assignor under or in connection with this Agreement and to bebound by the terms and conditions of this Agreement.11. **Choice of Law And Forum**This Agreement and the performance of the parties hereunder shall be construed in accordance withand governed by the laws of California, U.S.A., without respect to its conflict of law provisions.The parties hereto expressly consent, and submit themselves, to the exclusive jurisdiction of thecourts of California and to venue in the state or federal courts in the County of Santa Clara,California.12. **Modifications**No amendment or modification to this Agreement shall be valid or binding upon the parties unlessmade in writing and signed by authorized representatives of the parties. 12
 

 
13. **Entire Agreement**This Agreement contains the full and complete understanding and agreement between the partiesrelating to the subject matter hereof and supersedes all prior and contemporary understandings andagreements, whether oral or written, relating to such subject matter.14. **Severability**If any provision of this Agreement is or becomes, at any time or for any reason, unenforceable orinvalid, no other provision shall be affected hereby, and the remaining provisions of thisAgreement shall continue in full force and effect.15. **Counterparts**.This Agreement may execute in two or more counterparts, each of which shall be deemed an original,and all of which together shall constitute one and the same instrument. This Agreement shallbecome binding when one or more counterparts, individually or taken together, shall bear thesignatures of all the parties hereto.IN WITNESS, THE AUTHORIZED REPRESENTATIVES OF THE PARTIES HAVE EXECUTED THIS CONTRACT.     ESS Technology, Inc. Hangzhou Silan Microelectronics Co., Ltd.        Signature  Signature                        By:     By:                 Name                Name             Title  Title   13
 

 
ESS-SILAN DVD TECHNOLOGY LICENSE AGREEMENTEXHIBIT 1DESCRIPTION[****]FEATURES o [****] o [****]Note: For detailed specifications, please refer to ESS Phoenix 2 datasheet supplied to Silan **** Confidential Treatment Requested. 14
 

 
ESS-SILAN DVD TECHNOLOGY LICENSE AGREEMENTEXHIBIT 2DESCRIPTION[****]FEATURES o [****] § [****]Note: For detailed specifications, please refer to ESS LMX 2 datasheet supplied toSilan. **** Confidential Treatment Requested. 15
 

 
ESS-SILAN DVD TECHNOLOGY LICENSE AGREEMENT