Exhibit 10.19
 
***    Confidential portions of this document have been redacted and separately
filed with the Commission.
 
LICENSE AGREEMENT
 
This License Agreement (“License Agreement”), dated and effective August 24,
2001 (“Effective Date”), by and between:
 
Harman International Industries, Inc. (“HIII”) a Delaware corporation having its
headquarters at 8500 Balboa Blvd., Northridge, CA 91329, U.S.A.
 
and
 
American Technology Corporation (“ATC”), a Delaware corporation, having its
principal place of business at 13114 Evening Creek Drive South, San Diego,
California 92128
 
(collectively “Parties” or individually “Party”).
 
In consideration of the promises and covenants set forth in this License
Agreement, the Parties agree as follows:
 
1.    Background of License Agreement.
 
1.1.    Harman is engaged in the design and manufacture of multimedia and audio
systems and components including transducers, loud speakers, and loud speaker
systems.
 
1.2. ATC is a research, development and engineering company whose mission is to
design, build and market, inter alia, single sided planar magnetic transducers.
 
1.3. The Parties desire to enter into this License Agreement to allow Harman
access to ATC’s planar magnetic transducer technology, patent applications and
resulting patents so that Harman can modify, make, have made, use, sell, offer
for sale and/or import/export Harman Licensed Products.
 
2.    Definitions.
 
As used in this License Agreement, the following terms shall have the meanings
set forth below:
 
2.1 “Affiliate” shall mean: (i) any corporation or other entity that Harman
owns, directly or indirectly, at least 50% of the voting shares; and/or (ii) any
corporation or other entity where Harman owns, directly or indirectly, at least
50% of the equity.
 
2.2 “ATC Licensed Patents” shall mean the ATC Licensed Patent Applications
identified in Schedule A and all enabling related patents, as well as all
divisions, continuations, continuations-in-part, reissues, reexaminations or
extensions developed,

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owned or licensed by ATC that relate to planar magnetic transducers, and any
patents or pending patent applications obtained or applied for in relation to
Improvements. ATC shall bear the expense of filing for and prosecuting patent
applications in the United States and in other countries as it elects to file
for patent protection that are listed in Schedule A, and for the payment of any
maintenance fees or annuities on any ATC Licensed Patent that has issued and is
listed on Schedule A. [***]
 
2.3    “Automotive Field of Use” shall mean Licensed Products sold in the
automotive field including original equipment manufacturers and after-market
sales that are sold under Harman brand names or under no brand name.
 
2.4    “Harman” shall mean HIII and its Affiliates.
 
2.5    “Harman Licensed Products” shall mean Harman’s products described as
single ended, planar magnetic transducers incorporating, or encompassed by at
least one Valid Claim.
 
2.6    “ATC Licensed Technology” shall mean ATC’s Single-ended planar magnetic
transducer loudspeaker technology, developed by Graebener and/or ATC, employing
high-energy magnets in a single-ended driver configuration.
 
2.7    “Separately Acquired Intellectual Property” shall mean intellectual
property acquired by Harman encompassing planar magnetic transducer technology.
 
2.8    “Royalty” shall mean the royalty payable by Harman to ATC as provided in
Article 4 for the rights granted under this License Agreement pursuant to
Section 3.2.
 
2.9    “Royalty Expiration Date” means the date where ATC no longer has a Valid
Claim in any of the ATC Licensed Patents covering any Harman Licensed Product.
 
2.10    “Unit Royalty Payment” means the amount of Royalty for each Harman
Licensed Product shipped by Harman to a third party.
 
2.11    “Valid Claim” shall mean at least one patent claim of a filed, issued,
or unexpired ATC Licensed Patent reading on a Harman Product that has not been:
(a) held invalid or unenforceable by a final decision of a court or governmental
agency of competent jurisdiction, and the decision is not appealable or was not
appealed within the required time; or (b) admitted in writing to be invalid or
unenforceable by the patent owner.
 
3.0    Ownership, License Grant, License Grant for Improvements, and Engineering
 

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3.1    ATC Licensed Technology. ATC retains all right, title and interest in and
to the ATC Licensed Patents, including the technology described and claimed in
the patent and pending applications listed in Schedule A. No transfer of
ownership rights in and to the ATC Licensed Patents is made or effected by this
License Agreement.
 
3.2    License Grant to ATC Licensed Technology. ATC grants to Harman a royalty
bearing, worldwide, non-exclusive right and license, within the Automotive Field
of Use, without the right to sublicense, in and to the ATC Licensed Patents and
Technology to make, have made (ATC shall not unreasonably withhold authorization
for Harman to have Licensed Products made by a third party), use, sell, lease,
otherwise distribute, demonstrate, dispose of, offer for sale and/or
import/export Harman Licensed Products. ATC shall furnish to Harman all
information and documents in its possession relating to the ATC Licensed Patents
and Technology and the commercialization and exploitation of the ATC Licensed
Patents and Technology that are necessary to enable Harman to make, have made,
use, sell, lease, otherwise distribute, demonstrate, dispose of, offer for sale
and/or import/export Harman Licensed Products and otherwise fully exploit the
rights granted by ATC.
 
3.3    Jointly Developed Improvements. [***]
 
3.4    Harman shall mark its Harman Licensed Products or accompanying product
literature with “Patent Pending” and/or the relevant U.S. Patent Number, as
practical, when any U.S. patent application on the ATC Licensed Patent issues.
 
3.5    [***]
 
3.6    Harman and ATC shall enter into a separate Engineering Services Agreement
(Schedule B) pursuant to which Harman shall pay to ATC $10,000 per month and ATC
shall provide Harman with certain engineering services and submit a detailed,
written monthly report of man hours worked and tasks completed pursuant to
Harman’s direction. Any improvement to planar magnetic technology developed by
or for Harman during the period of the Engineering Services Agreement shall be
subject to [***].
 
4.0    Payments by Harman to ATC.
 
4.1    Royalty. In consideration of the rights granted by ATC to Harman pursuant
to Section 3.2 under this License Agreement, Harman shall pay the following
amounts to ATC.
 
4.2    Upon signing of this License Agreement, Harman shall pay to ATC [***].
 

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4.3    Within five days after both Parties have signed this License Agreement,
Harman shall pay to ATC [***] that shall be considered prepaid Royalties for the
first [***] of the Harman Licensed Product that is shipped, less any returns due
to warranty issues.
 
4.4    Within thirty (30) days of the issuance of a freedom to practice opinion
by Harman’s Intellectual Property Counsel covering the essential commercial
embodiment of the planar magnetic transducer design to be sold by Harman to its
customers, Harman shall pay to ATC [***] as prepaid Royalties covering the next
[***] of Harman Licensed Products [***] that is shipped, less any returns due to
warranty issues.
 
4.5    Within thirty (30) days of the execution by Harman of an initial sample
warrant occurring after completion of a pre-production approval process pursuant
to QS9000 procedures for a commercial embodiment of the planar magnet transducer
design of the Harman Licensed Product intended to be supplied to a customer of
Harman, but no later than October 31, 2003, Harman shall pay to ATC [***] as a
prepaid Royalty covering the next [***] units of Harman Licensed Products [***]
that are shipped, less any returns due to warranty issues.
 
4.6.    After Harman has shipped [***] units of the Harman Licensed Product,
Harman shall pay to ATC a running Unit Royalty Payment rate of [***] per unit of
Harman Licensed Product. [***]
 
4.7    [***]
 
4.8    [***]
 
4.9    Royalty Payments. [***]. ATC reserves the right to charge interest on
Royalty amounts not timely paid, shall be subject to an annualized interest rate
based on the London Inter Bank Offered Rate plus [***] basis points during the
period of delinquency.
 
4.10    Royalty Statement. Concurrently with payment of the Royalty, Harman
shall deliver to ATC a Royalty calculation statement. The Royalty statement
shall be limited to the quantities of the Harman Licensed Product shipped and
the amount due.
 
4.11    Right to Audit. During the term of this License Agreement and for two
(2) years thereafter, Harman shall maintain books and records sufficient to
determine the Royalty payments due under this License Agreement. At the request
of ATC, and no more than once during any calendar year, ATC may request Harman’s
independent public accounting firm who regularly audits Harman’s books and
records to furnish ATC with an auditor’s certificate as to the accuracy of the
Royalty payments made under this License Agreement. At the request of ATC,
Harman will allow an independent public accounting firm selected by ATC, during
regular business hours and in accordance with procedural guidelines established
by Harman, to verify the accuracy of the Royalty payments stated by Harman’s
independent public accountants for verification. Harman or ATC, as applicable,
shall promptly remit to the other party, the amount of any

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discrepancy discovered by such audit. Should the amount owed by Harman to ATC
with respect to the period verified as a result of such error or discrepancy
exceed [***] of the amount paid by Harman to ATC with respect to such period,
then Harman shall pay for the cost of the audit.
 
4.12    Harman shall be solely responsible for all taxes required to be paid by
it in connection with the sale of Harman Licensed Products.
 
5.0    [***]
 
5.1    [***]
 
5.2    [***]
 
6.0    Warranties by ATC.
 
6.1    ATC REPRESENTS AND WARRANTS THAT THE ATC LICENSED PATENT APPLICATIONS AND
RESULTING PATENTS UNDER THIS LICENSE AGREEMENT, HAVE BEEN DEVELOPED BY, LICENSED
BY OR ASSIGNED TO, OR OTHERWISE OWNED BY ATC AND MAY BE APPLICABLE TO THE HARMAN
LICENSED PRODUCTS.
 
6.2    ATC REPRESENTS AND WARRANTS THAT IT HAS OBTAINED THE NECESSARY
ASSIGNMENTS, LICENSES, AND PERMISSIONS TO GRANT THE LICENSED RIGHTS TO HARMAN
FOR ACCESS TO THE ATC LICENSED PATENTS.
 
6.3    ATC SHALL (1) PROSECUTE VIGOROUSLY ALL PATENT APPLICATIONS LISTED IN
SCHEDULE A, (2) KEEP SCHEDULE A UPDATED AND (3) KEEP HARMAN INFORMED OF ANY
ACTION BY PATENT ISSUING AUTHORITIES ON SUCH APPLICATIONS OR RESULTANT PATENTS.
 
6.4    ATC REPRESENTS AND WARRANTS TO HARMAN THAT ATC HAS THE FULL RIGHT, POWER
AND AUTHORITY TO ENTER INTO AND PERFORM ITS OBLIGATIONS SET FORTH IN THIS
LICENSE AGREEMENT. ATC FURTHER REPRESENTS AND WARRANTS THAT AT NO TIME HAS IT
FILED, OR CAUSED TO BE FILED, ANY PATENT APPLICATION IN ITS NAME OR IN THE NAME
OF OTHERS RELATING TO THE ATC LICENSED PATENTS, EXCEPT AS LISTED IN SCHEDULE A
TO THIS LICENSE AGREEMENT.
 
6.5    EXCEPT AS OTHERWISE SET FORTH ABOVE, THERE ARE NO OTHER WARRANTIES
PROVIDED BY ATC, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTIBILITY OR
FITNESS OF USE FOR A PARTICULAR PURPOSE.

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7.0    Warranties by Harman.
 
7.1    HARMAN REPRESENTS AND WARRANTS TO ATC THAT HARMAN HAS THE FULL RIGHT,
POWER AND AUTHORITY TO ENTER INTO AND PERFORM THIS LICENSE AGREEMENT.
 
8.0    Additional Limitations of Liability of the Parties.
 
8.1    UNDER NO CIRCUMSTANCES WILL HARMAN, ITS AFFILIATES OR CUSTOMERS, BE
LIABLE TO ATC FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL
DAMAGES OR LOST PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON CLAIMS
OF ATC, ITS AFFILIATES OR SUPPLIERS, EVEN IF IT HAS PREVIOUSLY BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF BREACH OF CONTRACT,
MISREPRESENTATION, NEGLIGENCE, STRICT LIABILTY IN TORT OR OTHERWISE. IN NO EVENT
SHALL THE AGGREGATE LIABILITY OF HARMAN, OR ITS CUSTOMERS EXCEED THE MAXIMUM
ROYALTY AMOUNT ACTUALLY PAID BY HARMAN TO ATC PURSUANT TO THIS LICENSE
AGREEMENT. DESPITE THIS EXCLUSION AND LIMITATION, THIS SECTION WILL NOT APPLY,
ONLY WHEN, AND ONLY TO THE EXTENT THAT, APPLICABLE LAW SPECIFICALLY REQUIRES
LIABILITY.
 
8.2    UNDER NO CIRCUMSTANCES WILL ATC BE LIABLE FOR ANY CONSEQUENTIAL,
INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOST PROFITS, WHETHER
FORESEEABLE OR UNFORESEEABLE, BASED ON CLAIMS OF HARMAN, OR ITS CUSTOMERS
(INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA, GOODWILL, USE OF MONEY
OR USE OF THE ATC LICENSED PATENTS, STOPPAGE OF OTHER WORK OR IMPAIRMENT OF
OTHER ASSETS), EVEN IF IT HAS PREVIOUSLY BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR IMPLIED WARRANTY, BREACH
OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR
OTHERWISE. IN NO EVENT SHALL THE AGGREGATE LIABILITY THAT ATC, ITS AFFILIATES OR
SUPPLIERS MAY INCUR IN ANY ACTION OR PROCEEDING, EXCEED THE TOTAL AMOUNT OF
ROYALTIES ACTUALLY PAID TO ATC BY HARMAN. DESPITE THIS EXCLUSION AND LIMITATION,
THIS SECTION WILL NOT APPLY, ONLY WHEN, AND ONLY TO THE EXTENT THAT, APPLICABLE
LAW SPECIFICALLY REQUIRES LIABILITY.
 
9.0    Term and Termination.
 
9.1    This License Agreement shall continue in full force and effect until
terminated by either Party as permitted in this License Agreement; provided that
no obligation of Harman under the provisions of Article 3 shall terminate.

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9.2    Termination of part of this License Agreement shall not excuse Harman
from its obligation to make Royalty payments pursuant to the surviving part of
this License Agreement. Survival of this License Agreement in part shall not
deprive either Party of the right to enforce its rights against the other Party
under the surviving part of the License Agreement.
 
9.3    Harman may terminate this License Agreement at its convenience at any
time upon providing ATC with at least thirty (30) days advance written notice of
such termination.
 
9.4    Either Party may terminate this License Agreement for any material breach
of this License Agreement by the other Party that is not cured within sixty (60)
days after the breaching Party received written notice of such breach.
 
9.5    Upon the termination of this License Agreement in its entirety, all
licenses and rights granted by ATC to Harman shall terminate. Promptly following
such termination, Harman shall return to ATC or destroy all tangible or
retrievable materials containing or constituting confidential information, and
any other materials received from ATC in connection with this License Agreement;
provided that, if this License Agreement terminates for any reason other than
the default of Harman, Harman shall have the right to continue to support its
existing customers and shall be entitled to retain such documentation pertaining
to the ATC Licensed Patents as it may reasonably require to provide such
support.
 
9.6    Notwithstanding termination of this License Agreement, Harman shall have
the right to sell, offer for sale and/or otherwise dispose of Harman Licensed
Products manufactured prior to the effective date of termination. Termination of
this License Agreement shall not release Harman from its obligation to make
Royalty payments to ATC with respect to Royalties that accrued prior to such
termination. It is understood, however, that all obligations of Harman to pay
Royalties shall end on the Royalty Expiration Date.
 
9.7    Harman or its representatives may, upon prior written notice to ATC,
inspect any agreements or business records of ATC that pertain to or otherwise
may potentially concern the rights granted to Harman under License Agreement,
during normal working hours, to verify ATC’s compliance with this License
Agreement. While conducting these inspections, Harman and its representatives
will be entitled to copy any item that ATC may possess in violation of this
License Agreement. All information obtained by Harman or its representatives for
this purpose shall be held by Harman and its representatives in confidence and
may not be disclosed by them to any person, or used for any purpose other than
as described in this Section 9.7.
 
10.0    Infringement by Third Parties.

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10.1    Each Party shall notify the other Party in writing of suspected or known
infringement(s), or any misappropriation(s) of the other Party’s intellectual
property and shall inform the other Party of any evidence of such
infringement(s) or misappropriation(s).
 
10.2    ATC shall be wholly entitled to recovery of damages from third parties
resulting from any lawsuit brought by ATC to enforce the ATC Licensed Patents.
 
10.3    Should ATC decide to not pursue a third party for infringement under the
ATC Licensed Patents or the Improvement Patents, Harman shall be entitled to
pursue such third party and Harman shall be wholly entitled to recovery of
damages from any third parties resulting from any lawsuit brought by Harman to
enforce ATC’s Licensed Patents or Improvement Patents. Otherwise, the percentage
of recovery shall be based on the percentage of contribution to the expenses
paid for pursuit of such infringement.
 
11.0    Confidentiality.
 
11.1    Notwithstanding the termination of this License Agreement, ATC and
Harman shall keep in confidence and prevent the use of, or disclosure to any
person or persons (excluding consultants, independent contractors or agents
outside their respective organizations who have agreed to the confidentiality
obligations of this License Agreement), and to any unauthorized person or
persons, all data or information or technology marked “Confidential” and
exchanged between both Parties. The disclosing Party shall identify and reduce
to writing any visual or oral disclosure of such confidential information and
provide such writing to the other Party within thirty (30) days of such
disclosure, along with an appropriate stamp or legend clearly indicating that
the information is of a confidential nature, and such data shall be treated in
confidence by the receiving party.
 
11.2    Notwithstanding Section 11.1, confidential information shall not include
information that:
 

 
i.
 
is or becomes available to the public without breach of this License Agreement;

 

 
ii.
 
is known to the receiving party at the time of the disclosure;

 

 
iii.
 
is disclosed by a third party, who, to the reasonable knowledge of the receiving
party, is without any restrictions on confidentiality;

 

 
iv.
 
is independently developed by the receiving party;

 

 
v.
 
becomes known to the receiving party from a source other than the disclosing
party without breach of this License Agreement; or

 

 
vi.
 
is required by law.

 
11.3    Neither Harman nor ATC shall be liable for inadvertent, accidental or
mistaken use or disclosure of information obtained under this License Agreement
so long as it has

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undertaken to preserve the confidentiality of the information and in no event
less than the precautions it takes to safeguard its own confidential
information.
 
11.4    Each Party understands that the other Party may currently or in the
future be developing information internally, or receiving information from third
parties that may be similar to disclosed confidential information under this
License Agreement. Accordingly, nothing in this License Agreement will be
construed as a representation or inference by either Party that it will not
develop products, or have products developed for it, or enter into joint
ventures, alliances, licensing or other business arrangements that without
violation of this License Agreement compete with products or systems embodying
confidential information under this License Agreement.
 
11.5    ATC shall issue a press release announcing the execution of this License
Agreement with Harman’s consent as to wording. Harman’s consent shall not be
unreasonably withheld and all future press announcements concerning the
Agreement must be approved in advance by both parties.
 
12.0    Export Restrictions
 
12.1    The Parties acknowledge that the Harman Licensed Products may be subject
to export controls under the U.S. Export Administration Regulations. ATC and
Harman shall (1) comply strictly with all legal requirements established under
these regulations, (2) cooperate fully with the each other in any official or
unofficial audit or inspection that relates to these controls and (3) not
export, re-export, divert, transfer or disclose, directly or indirectly, any
Harman Licensed Products to any of the following countries or to any national or
resident of these countries, unless the other Party has obtained prior written
authorization of the Party and the United States Commerce Department: Cuba,
Iran, Iraq, Libya, North Korea, Sudan or Syria. Upon notice by the U.S.
Government, this list of countries can be modified to conform to changes in the
United States Export Administration Regulations.
 
13.0    Compliance with Laws
 
13.1    Local Compliance. Each Party will, at its own expense, obtain and
maintain the governmental authorizations, registrations and filings that may be
required under any local laws to execute or perform its obligations under this
License Agreement. Each Party will otherwise comply with all laws, regulations
and other legal requirements that apply to this License Agreement, including tax
and foreign exchange legislation. Each Party will promptly notify the other
Party of any change in these laws, regulations or other legal requirements that
may affect the other Party’s performance under this License Agreement.
 
14.0    General Provisions.

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14.1    Assignment.    This License Agreement shall be binding upon any
successor to ATC in ownership or control of the ATC Licensed Patents, and the
obligations of ATC regarding this License Agreement, and all rights of the
successor to ATC’s rights shall be interpreted under this License Agreement. For
the purposes of this License Agreement, a merger, reorganization, or sale of
substantially all of ATC’s assets shall be deemed as an assignment.
 
14.2    Notice.    Any notice, approval or other communication required or
permitted under this License Agreement will be given in the English language and
will be sent in writing by overnight mail, facsimile, courier or registered mail
with postage prepaid, to the address specified below or to any other address
that may be designated by either Party by prior notice. Any notice or other
communication delivered by overnight mail or facsimile will be deemed to have
been received the first business day after it is sent. Any notice or other
communication sent by courier will be deemed to have been received on the third
business day after its date of posting. Any notice or other communication sent
by registered mail will be deemed to have been received on the 7th business day
after its date of posting.
 
Harman International Industries, Inc.
  
American Technology Corporation
8500 Balboa Blvd.
  
13114 Evening Creek Drive, S.
Northridge, CA 91329
  
San Diego, CA 92128
U.S.A.
  
U.S.A.
Telephone: (818) 895-3433
  
Telephone: (858) 679-2114
Attention: [***]
  
Attention: [***]

 
With a copy to:
 
[***]
  
[***]
Harman/Becker Automotive Systems
  
American Technology Corporation
39001 West 12 Mile Road
  
239 Parfitt Way, S.W., Suite 1-1B
Farmington Hills, MI 48331
  
Bainbridge Island, WA 98110
Telephone: (248) 994-2100
  
Telephone: (206) 780-3200

 
14.3    GOVERNING LAW.    THIS LICENSE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK,
EXCLUDING ITS CONFLICT OF LAW PRINCIPLES. HARMAN AND ATC AGREE TO EXCLUDE THE
UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS UNDER
THIS LICENSE AGREEMENT AND ANY TRANSACTION BETWEEN THE PARTIES THAT MAY BE
IMPLEMENTED IN CONNECTION WITH THIS LICENSE AGREEMENT. THE PARTIES AGREE THAT
THE SUBJECT MATTER AND PERSONAL JURISDICTION ARE PROPER IN THE COURTS LOCATED IN
U.S. DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK.

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14.4    Illegal Provisions.    If any provision of this License Agreement in any
way contravenes the laws of any country, state or jurisdiction where this
License Agreement is to be performed, that provision shall be deemed to be
deleted from this License Agreement and if any provision of this License
Agreement shall be declared by a final adjudication to be illegal or contrary to
public policy, it shall not affect the validity of any other terms or provisions
of this License Agreement.
 
14.5    Relationship of the Parties.    Each Party is acting as an independent
contractor and not as an agent, partner, or joint venturer with the other Party
for any purpose. Except as provided in this License Agreement, neither Party
shall have any right, power, nor authority to act or to create any obligation,
express or implied, on behalf of the other Party. Both Parties agree that no
interpretation of any provision of this License Agreement will be construed
against the other Party by reason of such other Party’s role in drafting such
provision or section.
 
14.6    Force Majeure.    Neither Party shall be responsible for delays, nor
failure of performance resulting from acts beyond the reasonable control of such
Party. Such acts shall include, but not be limited to, acts of God, strikes,
walkouts, riots, acts of war, epidemics, governmental regulations, earthquakes,
or other disasters.
 
14.7    Survival of Certain Provisions.    Articles 6, 7, 8, Sections 9.5, 9.6,
9.7, Articles 11 and 12, and Sections 14.3 and 14.7 of this License Agreement
shall survive the termination of this License Agreement.
 
14.8    Headings.    The titles and headings of the various sections and
paragraphs in this License Agreement are intended solely for convenience of
reference and are not intended for any other purpose whatsoever, or to explain,
modify or place any construction upon any of the provisions of this License
Agreement.
 
14.9    All Amendments in Writing.    No provisions in either Party’s
correspondence or other business forms employed by either Party will supersede
the terms and conditions of this License Agreement, and no supplement,
modification, or amendment of this License Agreement shall be binding, unless
executed in writing by a duly authorized representative of each Party to this
License Agreement.
 
14.10    Entire License Agreement.    The Parties have read this License
Agreement and agree to be bound by its terms, and further agree that it
constitutes the complete and entire License Agreement of the Parties and
supersedes any prior agreements, including all previous communications, oral or
written, and all other communications between the Parties relating to the
License Agreement, rights conveyed in the License Agreement and to the subject
matter of the License Agreement. No representations or statements of any kind
made by one Party, which are not expressly set forth in this License Agreement,
shall be binding on the other Party.

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14.11    Relationship of Parties.    It is agreed that the Agreement does not
constitute a partnership, joint venture or agency between the Parties of this
License Agreement, nor shall either of the Parties hold itself out as such,
contrary to the terms of this License Agreement by advertising or otherwise, nor
shall either of the Parties be bound or become liable because of any
representation, action or omission of the other.
 
The Parties have executed two original copies of this License Agreement as
follows:
 
Harman International Industries, Inc
 
American Technology Corporation
 
By:                                         
                                         
 
By:                                                                          
    Its:
 
        [***]
    Printed Name
 
        President, Acoustic Technology Division

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SCHEDULE A
 
ATC LICENSED PATENTS AND PATENT APPLICATIONS
 
PATENT NUMBER

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

    
TITLE

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

U.S. Patent No. 4,803,733
 
      
ATC Pending Patent Applications

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

    
TITLE

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

[***]
      
[***]
      
[***]
      
 
ATC Foreign Counterparts

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

    
TITLE

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[To Be Listed]
      

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SCHEDULE B
ENGINEERING SERVICES AGREEMENT
CONSULTING AGREEMENT
 
This Engineering Services Agreement is made as of August 24, 2001 (“Engineering
Services Agreement Effective Date”), between Harman International Industries,
Inc., a Delaware corporation, and American Technology Corporation (“ATC”), a
Delaware corporation. Harman and ATC agree as follows:
 
1.
 
Experience.    ATC has unique experience in single ended planar magnetic
transducer technology.

 
2.
 
Engagement.    Harman engages ATC, and ATC accepts such engagement, to aid,
assist and otherwise act as a consultant to Harman in the further development of
single ended planar magnetic transducer technology. ATC shall furnish Harman
with the full benefit of its knowledge, skill and experience as to all questions
and problems that Harman may present to ATC and shall answer, advise, opine and
suggest to such questions and problems to the best of its ability. Harman shall
from time to time assign to ATC agreed upon specific tasks in planar magnetic
transducer technology. ATC shall investigate and experiment as requested or as
they shall deem necessary in order to accomplish such tasks. The completion of
those tasks pursuant to the agreed upon performance criteria, rather than the
amount of hours spent by ATC in providing services to the Harman, shall
determine whether ATC is performing adequately under this Agreement. ATC shall
submit a written report on the first of each month summarizing the previous
month’s activities, hours worked, and progress on the assigned projects. As to
the consulting, ATC shall report to and take instructions from [***] until
otherwise notified by Harman.

 
3.
 
Term.    The term of this Agreement shall commence on the Engineering Services
Agreement Effective Date and shall, subject to earlier termination, continue
until December 31, 2003 Harman may immediately terminate this Agreement at any
time for breach by ATC of any term in this Agreement. Either Party may terminate
this Agreement for any reason or for no reason, in each Party’s sole discretion,
upon at least thirty (30) days prior written notice to the other Party. Neither
Party shall have any obligation to the other following termination of this
Engineering Services Agreement.

 
4.
 
Compensation.    Harman shall pay ATC ten thousand U.S. dollars ($10,000.00) per
month within ten (10) days of receiving the monthly statement referred to in
Section 2; provided that no payment shall be due prior to the tenth day of the
month following the month that engineering services were rendered. Such
compensation shall be full consideration for ATC’s services under this
Engineering Services Agreement regardless of any additional time that may be
devoted by ATC.

 
5.
 
Expense Reimbursement.    ATC shall be entitled to reimbursement by Harman for
any ordinary and necessary expenses incurred by ATC in the performance of ATC’s
duties upon submission to Harman of an expense report in accordance with Harman
policies and procedures, and providing that receipts and records as necessary to
substantiate such expenses.

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***    Confidential portions of this document have been redacted and separately
filed with the Commission.

6.
 
Place of Performance.    Harman shall make available to ATC access to its
facilities as are reasonably required by ATC in the performance of their
services under this Engineering Services Agreement. If the Parties agree that
ATC should perform their services elsewhere, Harman shall not be responsible for
rent or other charges in connection with those facilities.

 
7.
 
Warranties.    ATC REPRESENTS AND WARRANTS THAT (A) THEIR REPRESENTATIVES ARE
FREE TO RENDER CONSULTING SERVICES TO HARMAN, (B) SUCH SERVICES DO NOT CONFLICT
WITH ANY PRIOR OR PRESENT COMMITMENT OR OBLIGATION OF ATC, AND (C) ATC’S
REPRESENTATIVES WILL NOT, AT ANY TIME, USE FOR HARMAN’S BENEFIT OR DISCLOSE TO
HARMAN ANY INFORMATION THEY HAVE RECEIVED FROM THIRD PARTIES AND THAT THEY ARE
STILL LAWFULLY OBLIGATED TO KEEP CONFIDENTIAL.

 
8.
 
Confidentiality.    ATC may be given access to certain confidential and
proprietary information, including trade secrets, of Harman, including those of
subsidiaries and/or affiliates of the Harman. For purposes of this Engineering
Services Agreement, the words “Confidential” shall have the definition detailed
in Article 11 of the License Agreement.

 
9.
 
Independent Contractor.    ATC shall render services under this Engineering
Services Agreement as an independent contractor. ATC representatives shall, at
all times, act and perform as an independent contractor and not as agents or
employees of Harman. Nothing in this Agreement shall be deemed to create an
employee-employer or agent-principal relationship between ATC, including
representatives of ATC and Harman, nor to authorize ATC or its representatives
to act as an agent or legal representative for Harman. ATC acknowledges that its
representatives are not authorized to act as Harman legal representative or
otherwise. ATC further acknowledges that its representatives will not be
entitled to participate as an employee in or under any employee benefit plan of
Harman, nor to receive any other employment rights or benefits available to or
enjoyed by employees of the Harman.

 
10.
 
Assignment.    This Agreement requires the performance of personal services by
ATC and its representatives. ATC shall not assign any right, delegate any duty
or otherwise transfer any interest hereunder without Harman’s prior written
approval, and any attempted such assignment, delegation or transfer without such
consent shall be null and void.

 
11.
 
Notices.    All notices and other communications required or permitted to be
given under this Engineering Services Agreement, if in written form, will be
deemed given five business days after deposit by first class U.S. mail, postage
prepaid and addressed to the other Party at their respective addresses set forth
in the License Agreement.

 
12.
 
Entire Agreement.    This Agreement contains the entire agreement between the
Parties and all prior and collateral representations or promises are merged into
this Engineering Services Agreement. No modification, waiver or termination of
any provision, nor any future representation, promise or condition in connection
with the subject matter of this Engineering Services Agreement shall be binding
upon the Parties unless made in writing, signed by an authorized representative
of ATC and an authorized representative of Harman.

 
13.
 
Waiver.    No waiver by either Party of any breach of any covenant or provision
of this Engineering Services Agreement shall be deemed to be a waiver of any
preceding or succeeding breach of the same or any other covenant or provision.

 
14.
 
Law.    This Agreement shall be construed in accordance with Section 14.3 of the
License Agreement.

 
Harman International Industries, Inc
     
American Technology Corporation
By:
  
                                                                              
                         
     
By:
  
                                                                              
                              
    
It                                                                              
                      
          
[***]
    
Printed Name                                         
                                  
          
President, Acoustic Technology Division

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