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                                                                   EXHIBIT 10.39

The Registrant has requested confidential treatment of portions of this
Agreement. Those portions have been redacted from the Agreement.

                                 AIWA'S RESPONSE

Background:-

SONY CORPORATION has indicated that it would be prepared to recognize AIWA as a
joint owner of the Format referred to in a Memorandum of Understanding and on
the same terms and conditions as set out in the written Memorandum of
Understanding made in April 1998 between SONY and ECRIX (the "MOU") subject to
AIWA agreeing not to sell "aiwa" branded VXA products for the foreseeable future
(estimated at 6 - 12 months).

Conditions of Acceptance

AIWA confirms that it would be agreeable to accepting such a proposal subject to
ECRIX's agreement to all the following terms and conditions;

     1. Ecrix shall be entitled to sell "Ecrix" branded VXA products in AIWA's
Sales Territories (as defined in the Manufacturing and Supply Agreement
currently being negotiated between AIWA and Ecrix - the "MSA") provided that
AIWA reserves the right to concurrently sell "Ecrix" branded VXA products in
AIWA's Sales Territory; and

     2. That the reasonable mark-up on the price to Ecrix for Product units
referred to in paragraph 3. of Article VI of the Joint Development Agreement
between AIWA and ECRIX dated the 4th day of December, 1997 be increased to
[Confidential Information Redacted] of the total direct materials cost, and that
the price for such products supplied by AIWA to Ecrix be increased accordingly;
and

     3. AIWA shall be entitled to sell Application Products, and in connection
with such Application Products;

     (a)  ECRIX will provide AIWA with any necessary VXA interface related
          technology related to the development, manufacture and sale of
          Application Products; and

     (b)  AIWA will pay ECRIX compensation upon the sale of such Application
          Products on a per unit basis in such amount as shall be determined by
          the parties based upon comparable amounts being charged in the
          Consumer Product industry at the time (the "Per Unit Amount"); and

     (c)  the amount of per unit compensation determined in accordance with
          paragraph (b) above and payable by AIWA shall be adjusted depending
          upon the territory where the relevant Application Product is sold by
          the following;

          o    Application Products sold in AIWA's Sales Territories -
               [Confidential Information Redacted];


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          o    Application Products sold in the United States - [Confidential
               Information Redacted] the Per Unit Amount;

          o    Application Products sold in the Europe and other Territories -
               [Confidential Information Redacted] the Per Unit Amount.

     4. The receipt by AIWA of the written recognition from SONY in accordance
with the terms referred to in the Background section above in such a manner as
is acceptable to AIWA.

     Dated this 9th day of December, 1998;

ECRIX CORPORATION                            AIWA CO., LTD.



/s/ Juan A. Rodriguez                        /s/ Toshitatsu Iwai
------------------------------------         ---------------------------------
Mr. Juan A. Rodriguez                        Mr. Toshitatsu Iwai
Chairman                                     Senior Managing Director



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