<PAGE>   1
                                                                     EXHIBIT 2.1


                            ASSET PURCHASE AGREEMENT

                                     BETWEEN

                                 SRS LABS, INC.

                                       AND

                              ROCKTRON CORPORATION

<PAGE>   2

                                TABLE OF CONTENTS
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<S>     <C>                                                                     <C>
I.      Purpose of Agreement                                                      1

II.     Purchase and Sale of the Assets                                           1
        A.      Assets                                                            1 
                1.      Test and Demonstration Equipment and Documentation        1
                2.      Product Samples                                           1
                3.      Business Support Records and Data                         1
                4.      Intellectual Property                                     1
                5.      Software                                                  2
                6.      Contract Rights                                           2
        B.      Delivery/Risk of Loss                                             2

III.    Consideration                                                             2
        A.      Initial Payments                                                  2
        B.      Royalty Payments                                                  3
        C.      License                                                           4

IV.     Representations and Warranties                                            4
        A.      Representations and Warranties of Each Party                      4
        B.      Representations and Warranties of the Seller                      4
                1.      No Conflict                                               5
                2.      Title to the Assets                                       5
                3.      Intellectual Property                                     6
                4.      Actions and Proceedings                                   6
                5.      Consents                                                  6
                6.      Contracts                                                 6
                7.      Status of License with Analog Devices                     6
                8.      Investment Representations and Warranties                 6
                9.      Accuracy of Documents and Information                     9
                10.     Taxes                                                     9
        C.      Representations and Warranties of the Buyer                       9
                1.      No Conflict                                               9
                2.      Actions and Proceedings                                   9
                3.      Consents                                                 10
                4.      Status of the Shares                                     10
                5.      Accuracy of Documents and Information                    10

V.      Indemnification                                                          10
        A.      Indemnification by the Seller                                    10
        B.      Indemnification by the Buyer                                     11
        C.      Notice of Claim                                                  11
        D.      Defense                                                          11
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        E.      Duration of Parties' Obligations                                 12

VI.     Costs                                                                    12
A.      Finder's or Broker's Fees                                                12
B.      Expenses                                                                 12

VII.    Additional Agreements and Post-Closing Matters                           13
        A.      Additional Agreements                                            13
        B.      License Agreement to Seller                                      13
                1.      Improvements by the Seller                               13
        C.      Post-Closing Support                                             14
                1.      Technical Support                                        14
                2.      Engineering Support                                      14

VIII.   Miscellaneous                                                            15
        A.      Notices                                                          16
        B.      Bulk Sales                                                       16
        C.      Headings                                                         16
        D.      Entire Agreement; Modification; Waiver                           16
        E.      Counterparts                                                     16
        F.      Parties in Interest                                              17
        G.      Assignment                                                       17
        H.      Governing Law                                                    17
        I.      Venue                                                            17
        J.      Further Assurances                                               17
        K.      Validity; Severability                                           18
        L.      Press Release                                                    18
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Attachments 
and Exhibits
------------
Exhibit A         Prohibited Licensees
Attachment 1      Product Samples
Attachment 2      Test and Demonstration Equipment and Documentation and Business 
                  Support Records and Data Assignment
Attachment 3      Trademark Assignment
Attachment 4      Patent Assignment
Attachment 5      Copyright Assignment
Attachment 6      Contract Assignment
Attachment 7      Royalty and Other Payments
Attachment 8      License Agreement
Attachment 9      Registration Rights Agreement
</TABLE>

        With the exception of the Registration Rights Agreement (Attachment 9)
which is filed as part of the Company's Quarterly Report on Form 10-Q for the
Quarter Ended June 30, 1998 as Exhibit 10.1, the remaining above-referenced
Attachments and Exhibit have not been filed herewith. The Company will furnish
supplementally a copy of any omitted Exhibit or Attachment to the U.S.
Securities and Exchange Commission upon request.
<PAGE>   5
                            ASSET PURCHASE AGREEMENT

        This Asset Purchase Agreement (the "Agreement"), dated as of May 21,
1998 (the "Closing Date"), is entered into by and among Rocktron Corporation, a
Michigan corporation (the "Seller") and SRS Labs, Inc., a Delaware corporation
(the "Buyer").

I.      PURPOSE OF AGREEMENT.

        The Seller wants to sell to the Buyer, and the Buyer wants to buy from
        the Seller, certain assets of the Seller related to technology for the
        encoding of four or five channels to two channels of sound and decoding
        the two channels back to four or five channels of sound (the "Circle
        Surround Technology").

II.     PURCHASE AND SALE OF THE ASSETS.

        The Seller hereby agrees to sell, transfer, convey and deliver to the
        Buyer and the Buyer hereby agrees to purchase from the Seller, subject
        to and upon the terms and conditions contained herein or attached
        hereto, all of the Assets (defined below), free and clear of all
        options, liabilities, obligations, liens, pledges, mortgages, security
        interests or other encumbrances of any kind.

        A. Assets. The "Assets" means the following property related to the
        Circle Surround Technology:

                1.      Test and Demonstration Equipment and Documentation.
                        Documentation, instructions, blueprints, drawings,
                        schematics, marketing materials, demonstration discs
                        (CD's) and a list of audio and video tapes utilized in
                        the design, manufacture, testing and demonstration of
                        products utilizing the Circle Surround Technology, all
                        as listed in the Assignment - Test and Demonstration
                        Equipment and Documentation and Business Support Records
                        and Data (Attachment 2).
          
                2.      Product Samples. Samples of specific consumer products,
                        all as listed in Attachment 1.

                3.      Business Support Records and Data. Correspondence
                        identifying potential customers, customer and vendor
                        lists and contact logs, sales order files,
                        confidentially and other business agreements, logo and
                        trademark artwork and the file histories of the patents
                        and trademarks described in Articles II.A.4.b. and
                        II.A.4.c below, all as described in Assignment - Test
                        and Demonstration Equipment and Documentation and
                        Business Support Records and Data (Attachment 2).
          
                4.      Intellectual Property. Intellectual property shall
                        include:

                        1.      All intellectual property described in the
                                Assignment- Test and Demonstration Equipment and
                                Documentation and Business Support Records and
                                Data (Attachment 2).

                        2.      The trademarks and trademark applications,
                                including, all goodwill associated therewith,
                                described in the Assignment - Trademarks
                                (Attachment 3).

                        3.      The patents and patent applications described in
                                the Assignment - Patents (Attachment 4).
<PAGE>   6

                        4.      The copyrights described in the Assignment -
                                Copyright (Attachment 5).

                5.      Software. All software including media storage and
                        printed versions, together with all associated
                        documentation as described in the Assignment - Copyright
                        (Attachment 5).

                6.      Contract Rights. All rights of the Seller, under the
                        agreements described in the Assignment - Contracts
                        (Attachment 6) (the "Contracts"). Notwithstanding
                        anything to the contrary, the Seller shall retain all
                        rights and liabilities associated with the "velocity"
                        trademark/litigation settlement related to Rocktron
                        Corporation v. Robert Bosch Corporation (Civil Action
                        No. 97-73422) in the United States District Court,
                        Eastern District of Michigan, Southern Division.
               
        B.      Delivery/Risk of Loss.

                The Seller shall deliver the Assets to the Buyer at the Buyer's
                principal executive offices in Santa Ana, California. The Seller
                shall bear all costs incident to shipment of the Assets to such
                location. All risk of loss attributable to the Assets shall
                remain with the Seller until such time as the same have been
                actually delivered into the physical possession of the Buyer.

III.    CONSIDERATION.

        In consideration for the Assets, the Buyer shall pay to the Seller the
        following amounts:

        A.      Initial Payments.

                1.      A total of $500,000 shall be paid to the Seller
                        consisting of $450,000 paid on the Closing Date in the
                        form of a cashier's check or wire transfer to an account
                        designated by the Seller at least three (3) business
                        days prior to the Closing Date and $50,000 previously
                        paid to the Seller by the Buyer on April 9, 1998.

                2.      Shares of common stock of the Buyer, $.001 par value per
                        share (the "Common Stock"), with a value of $300,000,
                        determined by the method of computation as provided
                        below (the "Shares").

                        In making the computation of the Shares, the parties
                        shall determine a number of full shares of Common Stock
                        which have a total value as nearly equal to U.S.$300,000
                        as is practicable, by dividing into $300,000 the daily
                        average of the high and low sales prices for the Common
                        Stock on The Nasdaq Stock Market, Inc. as reported in
                        The Wall Street Journal (with the exception of any
                        errors in such reports) for each trading day during the
                        period beginning on and including March 16, 1998, and
                        ending on and including May 18, 1998, three (3) business
                        days prior to the Closing Date (the share price so
                        computed, the "Share Price"). The parties agree that the
                        Share Price equals $8.50 per share and the number of
                        Shares computed pursuant to this section equals 35,294.
                        Irrevocable instructions shall be delivered by the Buyer
                        to the Buyer's transfer agent on the Closing Date so
                        that a certificate in the name of the Seller
                        representing the Shares may be issued on the Closing
                        Date in the Seller's name and delivered by the Buyer to
                        the Seller as soon as practicable after the Closing
                        Date. At the Closing Date, the Buyer also shall enter
                        into a Registration Rights Agreement with the Seller in
                        the form set forth in Attachment 9.

        B.      Royalty Payments.


                                      -2-
<PAGE>   7

                1.      For the periods aggregating ten (10) years after the
                        Closing Date, the Buyer shall pay to the Seller the
                        royalties described on Attachment 7. Royalties shall be
                        computed based on the currency of the United States and
                        shall be paid in the currency of the United States.
                        Royalties shall be calculated at the end of every
                        calendar quarter ("Payment Period") and paid within
                        forty-five (45) days after the end of such Payment
                        Period. A written statement ("Royalty Statement") shall
                        accompany each royalty payment, or shall be sent alone
                        within such forty-five (45) day period if no royalties
                        are due for the respective Payment Period, providing a
                        complete itemized description of the calculation of the
                        royalties paid for the respective Payment Period.

                2.      The Buyer shall maintain books of account and records
                        concerning costs, sales and other items necessary for
                        the calculation of royalties for a period of three (3)
                        years after the respective royalty is paid. A certified
                        public accountant appointed by the Seller may, at the
                        Seller's expense, examine such books and records solely
                        for the purpose of verifying the accuracy of any Royalty
                        Statement or other accounting rendered by the Buyer
                        hereunder. The Seller agrees that such certified public
                        accountant shall be required to sign an agreement with
                        the Buyer protecting confidential information of the
                        Buyer and shall be authorized by the Buyer to report to
                        the Seller only the amount of royalties due and payable
                        in respect of the Royalty Statement examined. Such
                        examination shall take place at a mutually agreed upon
                        time and place, but in any event only during the Buyer's
                        normal business hours and upon reasonable advance
                        written request. The Buyer agrees to pay for the
                        reasonable fees, costs and expenses charged by any
                        certified public accountant engaged by the Seller for
                        such review if the royalties paid pursuant to the
                        Royalty Statement over a calendar year are understated
                        by more than fifteen percent (15%) of the royalties
                        actually due. The Seller shall have no other rights to
                        examine the Buyer's books and records.

                3.      The Buyer shall, at its option, be entitled to reduce
                        the amount that the Buyer would otherwise be obligated
                        to pay to the Seller pursuant to this Article III.B, in
                        satisfaction of any of the Seller's undisputed
                        obligations to the Buyer hereunder, including, without
                        limitation, any offset to which the Buyer is entitled to
                        under the provisions contained in Attachment 7.

        C.      License.

                1.      The Buyer is granting to the Seller a license to use the
                        Circle Surround Technology to the extent provided in the
                        license attached hereto as Attachment 8.

IV.     REPRESENTATIONS AND WARRANTIES.

        A.      Representations and Warranties of Each Party.

                Each Party (where applicable) represents and warrants to the
                other Party as follows:


                                      -3-
<PAGE>   8

                1.      It is a corporation duly organized, validly existing and
                        in good standing under the laws of its respective state
                        of incorporation, and has all necessary corporate power
                        and corporate authority to enter into and to perform its
                        obligations under this Agreement and the other documents
                        and agreements referenced or contemplated herein and to
                        consummate the transactions contemplated hereby.

                2.      The execution, delivery and performance of this
                        Agreement and the other documents and agreements
                        referenced or contemplated herein has been duly
                        authorized.

                3.      Each of this Agreement and the other documents and
                        agreements referenced or contemplated herein constitutes
                        a legal, valid and binding obligation of such Party,
                        enforceable against such party in accordance with its
                        respective terms, except as such enforceability may be
                        subject to or limited by (a) bankruptcy, insolvency,
                        moratorium, fraudulent conveyance or other similar laws
                        relating to the rights of creditors generally, (b)
                        limitations imposed by law or equitable principles upon
                        the availability of specific performance, injunctive
                        relief or equitable remedies, and (c) concepts of
                        materiality.

       B.       Representations and Warranties of the Seller.

                The Seller represents and warrants to the Buyer as follows:

                1.      No Conflict. The execution and the delivery of this
                        Agreement and the other documents and agreements
                        referenced or contemplated herein and the consummation
                        of the transactions contemplated hereby and thereby will
                        not:

                        a.      violate any term or provision of the Seller's
                                Articles of Incorporation or Bylaws;

                        b.      result in the creation of any lien or
                                encumbrance upon any of the Assets;

                        c.      result, to the Seller's present knowledge, in a
                                breach or violation of, or be in conflict with,
                                or constitute a default under, any judgment,
                                order, decree, statute, law, rule, regulation or
                                other restriction of any court, government or
                                governmental agency applicable to the Seller or
                                the Assets; or

                        d.      result in a breach or violation of, or be in
                                conflict with, or constitute a default under the
                                terms, conditions of any lease, license,
                                promissory note, conditional sales contract,
                                commitment, indenture, mortgage, deed of trust,
                                partnership agreement or other agreement,
                                contract, instrument or arrangement to which the
                                Seller is a party or any of the Assets is bound.

                2.      Title to the Assets. The Seller has and, upon the
                        consummation of the transactions contemplated by the
                        Agreement (the "Closing"), the Buyer shall have, sole,
                        good and marketable title to the Assets, free and clear
                        of all liens, encumbrances or claims of any kind


                                      -4-
<PAGE>   9

                        or nature whatsoever, including, without limitation,
                        those portions of the Assets which may have been
                        developed by the Seller's consultants or independent
                        contractors.
                        
                3.      Intellectual Property.

                        a.      Included in the Assets listed in Attachments 2,
                                3, 4 and 5 are all of the proprietary assets
                                (collectively, the "Intellectual Property")
                                owned by the Seller, or currently under
                                development by the Seller, or in which the
                                Seller owns rights, which are related to the
                                Circle Surround Technology as of the date
                                hereof. The use of the products incorporating
                                Circle Surround Technology by the Seller's
                                customers for the purpose for which sold, and
                                the use or publication by the Seller or the
                                Buyer of the technology disclosed in the
                                patents, trademarks and copyrights included in
                                the Assets do not, to the best of the Seller's
                                knowledge, involve infringement or claimed
                                infringement of any patent, trademark or
                                copyright. The Seller warrants that the patents
                                and trademarks included in the Assets are, to
                                the best of the Seller's knowledge, valid,
                                enforceable and free from defects.


                        b.      Except as set forth in this Agreement, the
                                Attachments and/or the Appendices hereto, the
                                Seller has not sold, transferred, licensed,
                                abandoned, released, pledged or subjected to
                                lien, charge or encumbrance of any kind any of
                                the Intellectual Property to be acquired by the
                                Buyer from the Seller. The Seller has paid all
                                maintenance fees or other governmental fees, and
                                made all necessary filings, required to keep the
                                Intellectual Property listed in Attachments 2,
                                3, 4 and 5 in full force and effect. There are
                                no immediate necessary formal actions which must
                                be taken to maintain the Intellectual Property
                                listed in Attachments 2, 3, 4 and 5 except as
                                specifically noted in the respective attachment.

                4.      Actions and Proceedings. There are no actions, suits, or
                        proceedings pending or, to the knowledge of the Seller,
                        threatened which, individually or in the aggregate,
                        would have a material adverse effect on the Seller or
                        the Assets or which would seek to question, delay or
                        prevent the consummation of, or materially impair the
                        ability of the Seller to consummate the transactions
                        contemplated hereby. 

                5.      Consents. Except as specifically provided in this
                        Agreement and to the best of the Seller's knowledge,
                        there are no authorizations, approvals, consents, orders
                        or waivers required to be obtained from, or notices or
                        filings required to be given to, or made with, any
                        government, governmental agency or any person (whether
                        or not governmental in character) in connection with (a)
                        the execution and delivery of this Agreement and the
                        other documents and agreements referenced or 
                        contemplated herein; (b) the consummation of the
                        transactions contemplated hereby; and (c) the
                        fulfillment of or the compliance with the terms,
                        conditions and provisions hereof.


                                      -5-
<PAGE>   10

                6.      Contracts. True and complete copies of all Contracts
                        included in the Assets have been made available to the
                        Buyer prior to the execution hereof. As of the date
                        hereof, except as otherwise provided in this Agreement:
                        
                        a.      there exist no circumstance, to Seller's
                                knowledge, which would affect the validity or
                                enforceability of any of the Contracts in
                                accordance with their respective terms;

                        b.      the Seller has performed and complied in all
                                material respects with all obligations required
                                to be performed by it to date under, and is not
                                in default (without giving effect to any
                                required notice or grace period) under, or in
                                breach of the terms, conditions or provisions of
                                any of the Contracts; and

                        c.      the legal validity and enforceability of any of
                                the Contracts has not been, and shall not in any
                                manner be, impaired by the consummation of the
                                transactions contemplated hereby. There is no
                                warranty with respect to the performance of any
                                of the Contracts.

                7.      Status of License with Analog Devices. The Seller never
                        received production silicon by year end 1997 as
                        specified under that certain Restricted Exclusive Analog
                        Technology and Nonexclusive Know-How and Trademark
                        License dated October 28, 1997 (the "ADI License
                        Agreement") by and between the Seller and Analog
                        Devices, Inc. ("ADI"). The Seller has provided to the
                        Buyer documentation evidencing the status of ADI's
                        performance with respect to the ADI License Agreement.
                      
                8.      Investment Representations and Warranties. The Seller
                        understands and represents and warrants for itself to,
                        and agrees with, the Buyer that:

                        a.      The Seller understands that no U.S. federal or
                                state agency has passed on, or made any
                                recommendation or endorsement of the Shares.

                        b.      The Seller acknowledges that, in making the
                                decision to accept (i) the Shares as part of the
                                purchase price for the Assets, it has relied
                                solely upon independent investigations made by
                                it and not upon any representations made by the
                                Buyer with respect to the Buyer or the Shares,
                                except for the representations and warranties in
                                this Agreement, except that the Seller has
                                received, reviewed and relied upon (i) the
                                Buyer's Annual Report to Stockholders for the
                                year ended December 31, 1997 and (ii) copies of
                                the Buyer's report on Form 10-KSB for the year
                                ended December 31, 1997, the Buyer's Current
                                Report on Form 8-K dated March 12, 1998 (and the
                                amendment to such Report filed on Form 8-K/A
                                dated May 18, 1998), and the Buyer's definitive
                                Proxy Statement dated April 30, 1998, each filed
                                by the Buyer pursuant to the Exchange Act,
                                which, together with any filings by 


                                      -6-
<PAGE>   11

                                the Buyer under the Exchange Act after the date
                                hereof and prior to the Closing, are defined as
                                "Exchange Act Reports."

                        c.      The Seller understands that the Shares are being
                                offered and sold to it in reliance on specific
                                exemptions from or non-application of the
                                registration requirements of U.S. federal and
                                state securities laws and that the Buyer is
                                relying upon the truth and accuracy of the
                                representations, warranties, agreements,
                                acknowledgments and understandings of the Seller
                                set forth herein in order to determine the
                                applicability of such exemptions and the
                                suitability of the Seller to acquire the Shares.

                        d.      The Seller is acquiring the Shares for
                                investment for such Seller's own account, not as
                                a nominee or agent, and not with a view to the
                                resale or distribution of any part thereof,
                                within the meaning of the Securities Act, and
                                the Seller has no present intention of selling,
                                granting any participation in, or otherwise
                                distributing the same within the meaning of the
                                Securities Act. By executing this Agreement, the
                                Seller further represents that it does not have
                                any contract, undertaking, agreement or
                                arrangement with any person to sell, transfer or
                                grant participation to such person or to any
                                third person with respect to any of the Shares.

                        e.      The Seller represents that it has had an
                                opportunity to ask questions and receive answers
                                from the Buyer regarding the terms and
                                conditions of the offering of the Shares and
                                that it has received the information it
                                requested regarding the business and affairs of
                                the Buyer.

                        f.      The Seller acknowledges that it is able to fend
                                for itself and bear the economic risk of its
                                investment and has such knowledge and experience
                                in financial or business matters that it is
                                capable of evaluating the merits and risks of
                                the investment in the Shares. 

                        g.      The Seller understands that the Shares it is
                                acquiring are characterized as "restricted
                                securities" under the U.S. federal securities
                                laws inasmuch as they are being acquired from
                                the Buyer in a transaction not involving a
                                public offering and that under such laws and
                                applicable regulations such securities may be
                                resold without registration under the Securities
                                Act only in certain limited circumstances. In
                                this connection, the Seller represents that it
                                is familiar with Rule 144 promulgated under the
                                Securities Act, as presently in effect, and
                                understands the resale limitations imposed
                                thereby and by the Securities Act.

                        h.      Without in any way limiting the representations
                                set forth above or restricting the Seller's
                                ability to utilize Rule 144, the Seller further
                                agrees not to make any disposition of all or any
                                portion of the Shares unless and until:


                                      -7-
<PAGE>   12

                                (i)     There is then in effect a registration
                                        statement under the Securities Act
                                        covering such proposed disposition and
                                        such disposition is made in accordance
                                        with such registration statement; or

                                (ii)    (x) The Seller shall have notified the
                                        Buyer of the proposed disposition and
                                        shall have furnished the Buyer with a
                                        detailed statement of the circumstances
                                        surrounding the proposed disposition,
                                        and (y) if requested by the Buyer, the
                                        Seller shall have furnished the Buyer
                                        with an opinion of counsel, reasonably
                                        satisfactory to the Buyer, that such
                                        disposition will not require
                                        registration of such shares under the
                                        Securities Act.

                        i.      The Seller has the financial ability to bear the
                                economic risk of its investment in the Shares,
                                has adequate means of providing for its current
                                needs and foreseeable future contingencies and
                                has no need for liquidity with respect to its
                                investment in the Shares. The Seller is an
                                "accredited investor," as that term is defined
                                in Regulation D promulgated under the Securities
                                Act.

                        j.      The Seller knows of no public solicitation or
                                advertisement in connection with the offer or
                                sale of the Shares.

                        k.      The Seller acknowledges that the certificates
                                representing the Shares shall contain the
                                following legend:

                                "THE SECURITIES REPRESENTED BY THIS CERTIFICATE
                                HAVE NOT BEEN REGISTERED UNDER THE U.S.
                                SECURITIES ACT OF 1933, AS AMENDED, OR
                                REGISTERED OR QUALIFIED UNDER ANY OTHER
                                SECURITIES LAW; THEY HAVE BEEN ACQUIRED BY THE
                                HOLDER FOR INVESTMENT AND MAY NOT BE PLEDGED,
                                HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE
                                DISPOSED OF UNLESS REGISTERED UNDER SUCH ACT AND
                                ANY APPLICABLE SECURITIES LAWS, OR UNLESS AN
                                EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE
                                AND SRS LABS, INC. ("SRS") SHALL HAVE RECEIVED,
                                AT THE EXPENSE OF THE HOLDER HEREOF, EVIDENCE OF
                                THE EXEMPTION REASONABLY SATISFACTORY TO SRS
                                (WHICH MAY INCLUDE, AMONG OTHER THINGS, AN
                                OPINION OF COUNSEL REASONABLY SATISFACTORY TO
                                SRS)."

                9.      Accuracy of Documents and Information. The copies of all
                        instruments, agreements, other documents and written
                        information delivered to the Buyer or any of its
                        representatives pursuant to this Agreement are complete
                        and correct in all material respects as of the date
                        hereof. The representations and warranties made by the
                        Seller 


                                      -8-
<PAGE>   13

                        in this Agreement, or in other written materials
                        furnished to the Buyer hereunder or in connection with
                        the transactions contemplated hereby, taken as a whole,
                        do not contain any untrue statement of material fact and
                        do not omit any material fact necessary to make the
                        statements or facts contained herein or therein not
                        misleading.

                10.     Taxes. The Assets shall be free and clear of any liens
                        or encumbrances created by Seller's failure to (a) file
                        applicable federal, state, county and local tax returns
                        required to have been filed, and (b) pay or caused to be
                        paid all taxes required to be paid, with respect to the
                        Assets in those jurisdictions where the nature or use of
                        the Assets requires such filing and where the failure to
                        do so would have a material adverse affect on the
                        Assets.


        C.      Representations and Warranties of the Buyer.

                The Buyer represents and warrants to the Seller as follows:

                1.      No Conflict. The execution and the delivery of this
                        Agreement and the other documents and agreements
                        referenced or contemplated herein and the consummation
                        of the transactions contemplated hereby and thereby will
                        not:

                        a.      violate any term or provision of the Buyer's
                                Certificate of Incorporation or Bylaws; or

                        b.      result in a breach or violation of, or be in
                                conflict with, or constitute a default under,
                                any judgment, order, decree, statute, law, rule,
                                regulation or other restriction of any court,
                                government or governmental agency applicable to
                                the Buyer.

                2.      Actions and Proceedings. There are no actions, suits, or
                        proceedings pending or, to the knowledge of the Buyer,
                        threatened which, individually or in the aggregate,
                        would have a material adverse effect on or which would
                        seek to question, delay or prevent the consummation of,
                        or materially impair the ability of the Buyer to
                        consummate, the transactions contemplated hereby.
                      
                3.      Consents. There are no authorizations, approvals,
                        consents or waivers required to be obtained from, or
                        notices or filings required to be given to or made with,
                        any government, governmental agency or third party for
                        the consummation by the Buyer of the transactions
                        contemplated hereby, except that in connection with the
                        issuance of the Shares to the Seller, the Buyer must
                        file a Nasdaq National Market Notification Form for
                        Listing of Additional Shares with The Nasdaq Stock
                        Market, Inc.

                4.      Status of the Shares. Upon consummation of the
                        transactions contemplated hereby, the Shares will have
                        been, validly issued, fully paid, and nonassessable.


                                      -9-
<PAGE>   14

                5.      Accuracy of Documents and Information. The copies of all
                        instruments, agreements, other documents and written
                        information delivered to the Seller or on behalf of the
                        Buyer or any of its representatives pursuant to this
                        Agreement are complete and correct in all material
                        respects as of the date hereof. The representations and
                        warranties made by the Buyer in this Agreement, or in
                        other written materials furnished to the Seller
                        hereunder or in connection with the transactions
                        contemplated hereby, taken as a whole, do not contain
                        any untrue statement of material fact and do not omit
                        any material fact necessary to make the statements or
                        facts contained herein or therein not misleading.

V       INDEMNIFICATION.

        A0      Indemnification by the Seller. The Seller shall defend and hold
                harmless the Buyer and its officers, directors, employees,
                attorneys, and agents and its successors and assigns against and
                in respect of any and all losses, damages, claims, obligations,
                demands, actions (pending or threatened), suits, proceedings,
                assessments, liabilities, judgments, recoveries and
                deficiencies, costs and expenses (including, without limitation,
                reasonable attorneys' fees and costs and expenses incurred in
                investigating, preparing, defending against or prosecuting any
                pending or threatened litigation, claim, proceeding or demand),
                all on an after-tax basis, less any amounts actually paid as
                insurance reimbursement, of any kind or character (collectively,
                a "Loss"), which arises out of, results from, or relate to:

                1.      the Seller's possession, ownership, use or transfer of
                        Assets prior to the date hereof;

                2.      the products made and sold by the Seller other than the
                        products provided to Buyer pursuant to Article II.A.2
                        hereof;

                3.      any breach of, or failure by the Seller fully to
                        perform, or any inaccuracy in, any of the
                        representations, warranties, covenants or agreements of
                        the Seller in this Agreement, or in any attachment,
                        schedule, exhibit, certificate, list, or other document
                        furnished or to be furnished by the Seller under this
                        Agreement; and/or

                4.      the "Velocity" trademark litigation/settlement related
                        to Rocktron Corporation v. Robert Bosch Corporation
                        (Civil Action No. 97-73422) in the United States
                        District Court, Eastern District of Michigan, Southern
                        Division.
                        
        B0      Indemnification by the Buyer. The Buyer shall defend and hold
                harmless the Seller and its officers, directors, employees,
                attorneys, and agents and its successors and assigns against and
                in respect of any and all Losses, which arise out of, result
                from, or relate to any breach of, or failure by the Buyer fully
                to perform, or any inaccuracy in, any of the representations and
                warranties, covenants or agreements of the Buyer in this
                Agreement or in any attachment, schedule, exhibit, certificate,
                list or other document furnished or to be furnished by the Buyer
                under this Agreement.


                                      -10-
<PAGE>   15

        C0      Notice of Claim. Whenever the Buyer or the Seller learns of or
                discovers any matter which may give rise to a claim for
                indemnification (the "Claim") against any other party under this
                Article V (the "Indemnity Obligor"), the Buyer or the Seller, as
                the indemnified party (the "Indemnified Party"), shall give
                notice to the Indemnity Obligor of the Claim. With respect to
                Claims which are the subject of actions, suits, or proceedings
                threatened or asserted in writing by any third party (a " Third
                Party Claim"), the Indemnified Party shall, within 15 days
                following receipt of such Third Party Claim, promptly notify the
                Indemnity Obligor in writing of any Claim for recovery,
                specifying in reasonable detail the nature of the Loss and the
                amount of the liability estimated to arise therefrom. If the
                Indemnified Party does not so notify the Indemnity Obligor
                within 15 days of its discovery of a Third Party Claim, such
                Claim shall be barred only to the extent that the Indemnity
                Obligor is prejudiced by such failure to notify. The Indemnified
                Party shall provide to the Indemnity Obligor as promptly as
                practicable thereafter all information and documentation
                reasonably requested by the Indemnity Obligor to verify the
                Claim asserted.

        D0      Defense. If the facts relating to a Loss arise out a Third Party
                Claim, or if there is any claim against a third party available
                by virtue of the circumstances of the Loss, the Indemnity
                Obligor may, by giving written notice to the Indemnified Party
                within 15 days following its receipt of the notice of such
                claim, elect to assume the defense or the prosecution thereof,
                including the employment of counsel or accountants, reasonably
                satisfactory to the Indemnified Party, at its cost and expense;
                provided, however, that during the interim the Indemnified Party
                shall use its best efforts to take all action (not including
                settlement) reasonably necessary to protect against further
                damage or loss with respect to the Loss. The Indemnified Party
                shall have the right to employ counsel separate from counsel
                employed by the Indemnity Obligor in any such action and to
                participate therein, but the fees and expenses of such counsel
                shall be at the Indemnified Party's own expense, unless (a) the
                employment thereof has been specifically authorized by the
                Indemnity Obligor, (b) such Indemnified Party has been advised
                by counsel reasonably satisfactory to the Indemnity Obligor that
                there may be one or more legal defenses available to it which
                are different from or additional to those available to the
                Indemnity Obligor and in the reasonable judgment of such counsel
                it is advisable for such Indemnified Party to employ separate
                counsel, or (c) the Indemnity Obligor has failed to assume the
                defense of such action and employ counsel reasonably
                satisfactory to the Indemnified Party. Whether or not the
                Indemnity Obligor chooses to defend or prosecute such claim, all
                the parties hereto shall cooperate in the defense or prosecution
                thereof and shall furnish such records, information and
                testimony and shall attend such conferences, discovery
                proceedings and trial as may be reasonably requested in
                connection therewith. The Indemnity Obligor shall not be liable
                for any settlement of any such claim effected without its prior
                written consent. In the event of payment by the Indemnity
                Obligor to the Indemnified Party in connection with any Loss
                arising out of a Third Party Claim, the Indemnity Obligor shall
                be subrogated to and shall stand in the place of the Indemnified
                Party as to any events or circumstances in respect of which the
                Indemnified Party may have any right or claim against such third
                party relating to such indemnified matter. The Indemnified Party
                shall cooperate with the Indemnity Obligor in prosecuting any
                subrogated claim. The Indemnity Obligor will take no action in


                                      -11-
<PAGE>   16

                connection with any claim that would adversely affect the
                Indemnified Party without the consent of the Indemnified Party.

        E0      Duration of Parties' Obligations. The Indemnity Obligor's
                indemnification obligations under this Agreement shall survive
                the Closing and shall terminate as follows: (a) with respect to
                claims for indemnifying arising under Articles V.A.1, V.A.2 and
                V.A.4, they shall continue and not terminate and (b) with
                respect to all other claims for indemnity, after ten (10) years
                from the date hereof.

VI      COSTS.

        A0      Finder's or Broker's Fees. The Seller represents to the Buyer
                that it has not made any arrangement or had any dealings whereby
                the Seller or the Buyer could become subject, absolutely or
                contingently, to a claim for any brokerage commission or
                finder's fee. The Buyer represents to the Seller that the Buyer
                has not and will not pay any brokerage commission or finder's
                fee in respect of the consideration to be paid under this
                Agreement or any other agreement made in contemplation of this
                Agreement, and the Buyer has not made any arrangement or had any
                dealings whereby the Seller could become subject, absolutely or
                contingently, to a claim for any brokerage commission or
                finder's fee. The Seller on the one hand, and the Buyer, on the
                other hand, each agree to indemnify and hold harmless the other
                against any and all claims, demands, losses, costs, expenses,
                obligations, liabilities, damages, recoveries, and deficiencies,
                including interest, penalties, and reasonable attorneys fees,
                incurred or suffered by reason of any brokerage commission or
                finder's fee alleged to be payable because of any act, omission
                or statement of the indemnifying party.

        B0      Expenses. Whether or not the transactions contemplated by this
                Agreement are consummated, each party shall pay its own fees and
                expenses incident to the negotiation, preparation, execution,
                delivery, and performance hereof, including, without limitation,
                the fees and expenses of its respective counsel, accountants and
                other experts.

VII     ADDITIONAL AGREEMENTS AND POST-CLOSING MATTERS.
    
        A0      Additional Agreements. Concurrently with the execution of this
                Agreement, each party shall execute and deliver to the other the
                following (to the extent a party thereto):

                1       Assignment Agreement - Test and Demonstration Equipment
                        and Documentation and Business Support Records and Data,
                        in the form attached hereto as Attachment 2.

                2       Assignment Agreement - Trademarks, in the form attached
                        hereto as Attachment 3.

                3       Assignment Agreement - Patent, in the form attached
                        hereto as Attachment 4.

                4       Assignment Agreement - Copyright, in the form attached
                        hereto as Attachment 5.

                5       Assignment Agreement - Contracts, in the form attached
                        hereto as Attachment 6.


                                      -12-
<PAGE>   17

                6       License Agreement, in the form attached hereto as
                        Attachment 8.

                7       Registration Rights Agreement, in the form attached
                        hereto as Attachment 9.

        B0      License Agreement to Seller. In connection with the Closing, the
                Buyer shall grant to the Seller a limited license, in the form
                attached hereto as Attachment 8, to use the Circle Surround
                Technology. Such license agreement shall prohibit the Seller
                from granting any sublicense thereunder (the "Circle Surround
                License"). 

                1       Improvements by the Seller. If at any time during this
                        Agreement any invention, new development, enhancement or
                        improvement, whether patentable or unpatentable,
                        relating to the Circle Surround Technology
                        (collectively, referred to herein as "Improvement") is
                        made by the Seller, including any such new development,
                        enhancement or improvement brought about by the Seller's
                        vendors or subcontractors, and as often as the same
                        shall occur: 

                        a.      During the First Two Years. During the first two
                                years of the Agreement, Seller shall not assign
                                or license any right, title and interest in and
                                to such invention, new development, enhancement
                                or improvement, to anyone other than Buyer.
                                However, for any Improvements which are assigned
                                to the Buyer during the first two years of this
                                Agreement, the Seller shall be granted a
                                non-exclusive royalty-free license back with
                                respect to such Improvements.

                        b.      While Performing Technical Engineering Support.
                                Improvements made by the Seller while performing
                                technical or engineering support (see Article
                                VII.C, herein) as often as the same shall occur,
                                shall become the sole property of the Buyer.
                                Seller shall furnish to the Buyer all relevant
                                information pertaining thereto and shall assign
                                to the Buyer or one of the Buyer's affiliates,
                                in the Buyer's sole and absolute discretion, all
                                right, title and interest in and to such
                                invention, new development, enhancement or
                                improvement, without the requirement of any
                                payment or royalty from the Seller. However, for
                                any Improvements which are assigned to the Buyer
                                pursuant to this Article VII.B.1.b., the Seller
                                shall be granted, a non-exclusive royalty-free
                                license back with respect to such Improvements
                                and the terms of this Agreement shall be
                                extended with respect to any such assigned
                                Improvement to Buyer so as to require payment of
                                royalties received by Buyer for such Improvement
                                pursuant to Attachment 7 hereto for ten (10)
                                years from the date of such assignment or
                                license to the Buyer.

                        c.      While Not Performing Technical or Engineering
                                Support. Improvements made by the Seller
                                relating to the Circle Surround Technology
                                during a time while not performing technical or
                                engineering support for the Buyer, shall be the
                                sole property of the Seller; provided however,
                                that Buyer has a right of first refusal to
                                license and/or purchase the Improvements made
                                after the first 


                                      -13-
<PAGE>   18

                                two years while not performing technical or
                                engineering support under such terms as may be
                                agreed upon by the Seller and the Buyer.

                2.      Prohibited Licenses. The Buyer agrees that it will not
                        grant license agreements for any of the Assets acquired
                        by the Buyer herein relating to the Circle Surround
                        Technology to those companies within the musical
                        instrument or professional audio industries which are
                        listed on Exhibit "A", without obtaining the Seller's
                        prior approval.

        C0      Post-Closing Support.

                1       Technical Support. The Seller shall, following all
                        reasonable requests, provide technical support and
                        training at no charge to the Buyer (except for
                        reasonable travel expenses, including, but not limited
                        to, transportation, lodging and meals and limited to a
                        maximum of one (1) round trip by a representative of the
                        Seller to a location other than the Seller's place of
                        business for a period not to exceed three (3) days) for
                        six (6) months following the date hereof. For purposes
                        of this Agreement, "technical support" shall mean
                        assistance to the Buyer in understanding and using the
                        Circle Surround Technology.

                2       Engineering Support. Following the Closing and for so
                        long as royalty payments or per-unit fees, if any, are
                        paid to the Seller, the Seller shall provide engineering
                        support to the Buyer. Unless otherwise requested by the
                        Buyer, the Seller agrees to designate James K. Waller,
                        Jr. to provide such services and by his acknowledgment
                        of this obligation in this Agreement James K. Waller,
                        Jr. agrees to provide such services. The Seller and Mr.
                        Waller shall provide the Buyer with an aggregate minimum
                        of 20 hours per month and an aggregate maximum of 32
                        hours per month, as requested by the Buyer. If Buyer
                        requires and requests more than 32 hours of engineering
                        support, the Seller may provide such support at its
                        discretion. For purposes of this Agreement, "engineering
                        support" shall mean assistance to the Buyer in the
                        application of the Circle Surround Technology as
                        contained in any related products and/or processes. For
                        engineering support, the Seller shall be paid $170 per
                        hour and shall be reimbursed for all reasonable travel
                        expenses including, but not limited to, transportation,
                        lodging and meals, with reimbursement to be made within
                        thirty (30) days of receipt by the Buyer of statements
                        therefor.

VIII    MISCELLANEOUS.

        A0      Notices. All notices, payments (other than at Closing),
                requests, demands and other communications under this Agreement
                shall be in writing and shall be deemed to have been given if
                personally delivered or if sent by telecopy or facsimile or
                mailed by overnight, commercial air courier service or by first
                class, registered or certified mail, postage prepaid, and
                properly addressed as follows:

                                      -14-
<PAGE>   19

                      If to the Seller:

                             Rocktron Corporation
                             2870 Technology Drive
                             Rochester Hills, MI 48309
                             Attention: Mr. James K. Waller, Jr., President
                             Facsimile: (248) 853-4163

                      with a copy to:

                             Catalano, Zingerman & Associates, P.C.
                             810 S. Cincinnati, Suite 200
                             Tulsa, Oklahoma 74119
                             Attention: Frank J. Catalano, Esq.
                             Facsimile: (918) 599-9889

                      If to the Buyer:

                             SRS Labs, Inc.
                             2909 Daimler Street
                             Santa Ana, CA 92705
                             Attention:  Janet M. Biski,
                             Vice President and Chief Financial Officer
                             Facsimile No. (714) 852-1099

                      with a copy to:

                             Paul, Hastings, Janofsky & Walker LLP
                             695 Town Center Drive, 17th floor
                             Costa Mesa, California  92647
                             Attention:  John F. Della Grotta, Esq.
                             Facsimile No. (714) 979-1921

                Any party may change its address for purposes of this Article by
                giving the other parties written notice of the new address in
                the manner set forth above. Notice will conclusively be deemed
                to have been given when personally delivered, or if given by
                mail, on the second day after being sent by an overnight,
                commercial air courier service or on the third day after being
                sent by first class, registered or certified mail, or if given
                by telecopy or facsimile machine, when confirmation of
                transmission is indicated by the sender's telecopy or facsimile
                machine.

        B0      Bulk Sales. The parties agree to waive compliance with the
                provisions of Article 6 of the Uniform Commercial Code (Bulk
                Transfers) as in effect in any jurisdiction and the bulk
                transfer and bulk sales laws of any applicable state or
                jurisdiction (the "Bulk Sales Laws") in connection with the
                purchase and sale of the Assets hereunder. The Seller shall
                indemnify 


                                      -15-
<PAGE>   20

                and hold harmless the Buyer, and shall reimburse the Buyer for,
                any losses that the Buyer may suffer as a result of or due to
                noncompliance with the provisions of the Bulk Sales Law.

        C0      Headings. The subject headings of the Articles and Sections of
                this Agreement are included for purposes of convenience only,
                and shall not affect the construction or interpretation of any
                of its provisions.

        D0      Entire Agreement; Modification; Waiver. This Agreement
                constitutes the entire agreement between the parties pertaining
                to the subject matter contained in it and supersedes all prior
                and contemporaneous agreements, representations, and
                understandings of the parties (except for the Confidentiality
                Agreement dated September 22, 1997 between the parties
                concerning the subject matter hereof). No supplement,
                modification or amendment of this Agreement shall be binding
                unless executed in writing by all the parties. No waiver of any
                of the provisions of this Agreement shall be deemed, or shall
                constitute, a waiver of any other provision, whether or not
                similar, nor shall any waiver constitute a continuing waiver. No
                waiver shall be binding unless executed in writing by the party
                making the waiver.

        E0      Counterparts. This Agreement may be executed in one or more
                counterparts, each of which shall be deemed an original, but all
                of which together shall constitute one and the same instrument.
                
        F0      Parties in Interest. Nothing in this Agreement, whether express
                or implied, is intended to:

                1       confer any rights or remedies under or by reason of this
                        Agreement on any persons other than the parties to it
                        and their respective successors and assigns;

                2       relieve or discharge any obligation or liability of any
                        third persons to any party to this Agreement; or

                3       confer upon any third person any right of subrogation or
                        action over or against any party to this Agreement.

        G0      Assignment. This Agreement shall be binding upon and inure to
                the benefit of successors and assigns of the Seller and the
                Buyer. The Buyer may freely assign its rights and obligations
                under this Agreement. The Seller may assign its rights and
                obligations under this Agreement with the following exceptions:
         
                1       The License Agreement attached hereto as Attachment 8 is
                        assignable but such assignment shall only be royalty
                        free with respect to the sale or manufacture of units up
                        to and including twice the number of units sold or
                        manufactured under the License Agreement in the
                        preceding 12 months. Any additional units sold or
                        manufactured under the License Agreement will incur a
                        royalty at prevailing market rates.

                2       The obligations of the Seller and James K. Waller, Jr.
                        described at Article VII.C may not be assigned.

                                      -16-
<PAGE>   21

        H0      Governing Law. This Agreement will be governed by and construed
                in accordance with the laws of the State of California without
                regard to the conflicts of law principles thereof. 

        I0      Venue. The parties hereby irrevocably and unconditionally
                consent to submit to the exclusive jurisdiction of the courts of
                the State of California, County of Orange, and/or the United
                States District Court for the Central District of California
                (Southern Division) for any actions, suits, controversies or
                proceedings arising out of or relating to this Agreement and the
                transactions contemplated hereby (and the parties agree not to
                commence any action, suit or proceeding relating thereto except
                in such courts), and further agree that service of any process,
                summons, notice or document by U.S. registered mail to the
                respective addresses set forth above shall be effective service
                of process for any action, suit or proceeding brought against
                the parties in any such court. The parties hereby irrevocably
                and unconditionally waive any objection to the laying of venue
                of any action, suit, controversies or proceeding arising out of
                this Agreement or the transactions contemplated hereby, in the
                courts of the State of California, County of Orange and/or the
                United States District Court for the Central District of
                California (Southern Division), and hereby further irrevocably
                and unconditionally waive and agree not to plead or claim in any
                such court that any such action, suit or proceeding brought in
                any such court has been brought in an inconvenient or improper
                forum.

        J0      Further Assurances. The Seller will from time to time subsequent
                to the Closing, at the Buyer's request and without further
                consideration, execute and deliver such other instruments of
                conveyance, assignment, and transfer, and take such other
                actions, as the Buyer may reasonably request in order to more
                effectively convey, assign, transfer the Assets to the Buyer.

        K0      Validity; Severability. Each Article, section, subsection and
                lesser section of this Agreement constitutes a separate and
                distinct undertaking, covenant and/or provision hereof. Whenever
                possible, each provision of this Agreement shall be interpreted
                in such manner as to be effective and valid under applicable
                law. In the event that any provision of this Agreement shall be
                determined to be unlawful, invalid or unenforceable, such
                provision shall be deemed severed from this Agreement, but every
                other provision of this Agreement shall remain in full force and
                effect. In substitution for any provision of this Agreement held
                unlawful, invalid or unenforceable, there shall be substituted a
                provision of similar import reflecting the original intent of
                the parties hereto to the fullest extent permissible under law.

        L0      Press Release. The Seller and its affiliates shall not release a
                press release relating to this Agreement or any of the
                transactions or documents contemplated hereby without first
                submitting a copy of such press release to the Buyer and
                obtaining the prior approval of the Buyer to any such press
                release, which approval shall not be unreasonably withheld. The
                Buyer shall provide the Seller an advance copy of the press
                release relating to the Closing of this Agreement.

                            (Signature page follows)


                                      -17-
<PAGE>   22

        IN WITNESS WHEREOF, the Seller and the Buyer have caused this Agreement
to be duly executed as of the date first above written.

<TABLE>
<S>                                                       <C>
SRS Labs, Inc., a Delaware corporation                    Rocktron Corporation, a Michigan corporation



By:       /s/ STEPHEN V. SEDMAK                           By:        /s/ JAMES K. WALLER, JR.
    -----------------------------------------                 ----------------------------------------
              Stephen V. Sedmak                                          James K. Waller, Jr.
      President and Chief Operating Officer                                    President



                                                           Acknowledged, agreed and accepted with
                                                           respect to Article VII, Section C.2

                                                                  /s/ JAMES K. WALLER, JR.
                                                           -------------------------------------------
                                                           James K. Waller, Jr., as an individual and
                                                           an employee of Rocktron Corporation
</TABLE>


                                      -18-