EXHIBIT 10.3

                               PURCHASE AGREEMENT

         This Agreement is dated this 30th day of December, 2000 (the "effective
date") by and  between  American  Technology  Corporation  ("ATC"),  a  Delaware
corporation, having a principal place of business located at 13114 Evening Creek
Drive  South,  San  Diego,  CA 92128 and ASI  Technology  Corporation,  a Nevada
Corporation  ("ASI"),  having a  principal  place  of  business  located  at 980
American Pacific Dr. Suite 111, Henderson, Nevada 89014.


                                    RECITALS

         WHEREAS,  ATC  has  developed  and  patented  certain  Sound  Reduction
technology.  As a result of ATC's  inventions  it was  awarded  U.S.  Patent No.
5,966,452  for Sound  Reduction  Method  and System  for Jet  Engines  issued on
October 12, 1999 (the "Patent"). ATC has filed corresponding patent applications
in Brazil, Canada, China, EPO, Japan and the Russian Federation.

         WHEREAS, this Sound Reduction technology is believed to have commercial
viability in commercial,  industrial, and military applications but will require
further development, additional capital and research.

         WHEREAS,  ATC desires to pursue other business  ventures and desires to
sell and otherwise assign all of its right,  title,  interest and benefit in and
to its Sound Reduction patent,  related  technology,  and all other intellectual
property  rights  related  thereto,  as defined in paragraph 1a) hereof,  to ASI
according to the terms and  conditions set forth below in order to allow further
development of this technology to be completed.

         WHEREAS,  ASI is a company  looking for new  technology to purchase and
exploit and ASI desires to purchase  ATC's  Sound  Reduction  issued  patent and
related technology according to the terms and conditions below.


                                      TERMS

         Now, therefore, in consideration of the mutual promises described below
and other good and valuable  consideration,  the  sufficiency of which is hereby
acknowledged, the parties hereby agree to be legally bound as follows:

1. Definitions. For purposes of this Agreement, the following definitions apply:

         a) "Technology"  shall be defined as all right,  title,  interest,  and
benefit of ATC and all powers and  privileges of ATC  (including  to make,  have
made, use, or sell under patent law; to copy, adapt,  distribute,  display,  and
perform under  copyright law; and to use and disclose under trade secret law) in
and to all proprietary rights  ("Proprietary  Rights") embodied in or related to
the Sound  Reduction  Method and System for Jet Engines  technology,  defined as
follows:

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                  1)  One  United   States  and   foreign   patents  and  patent
applications,  including,  without  limitation,  the issued  patents  and patent
applications  listed on Exhibit A hereto,  patent  license rights and patentable
inventions,  any  continuation  or  continuation-in-part  of,  division  of,  or
substitution for any such applications, any United States patent issued thereon,
any reissue or reexamination application filed on any such United States patent,
any reissue patent or reexamined  patent issuing  thereon,  and any extension of
any such United States patent or reissue patent and any and all applications for
patent in any country foreign to the United States on any invention disclosed in
any of said  patents  or patent  applications  described  above and any  patents
granted thereon;

                  2) All trade secrets,  know-how,  confidential  or proprietary
information,  including,  without  limitation,  the confidential and proprietary
information  identified  in  Exhibit  B hereto,  shop  rights,  technical  data,
technology licenses, concepts, drawings, schematics,  prototypes,  improvements,
enhancements,   upgrades,  materials,  works  of  authorship,   derivative,  and
derivative works, mask works,  engineering  files,  system  documentation,  flow
charts,  computer software code and design specifications  acquired or developed
by ATC or any of its affiliates  that are embodied or  incorporated  in, derived
from or in any way related to the  Proprietary  Rights or in connection with the
development of the programming,  inventions, processes, and apparati entailed by
the Proprietary Rights;

                  3)  All  market  research  and  information,   contact  lists,
marketing materials,  business plans, notes, documents and records pertaining in
any way to any of the  Proprietary  Rights and any  existing or future  products
incorporating any of the Proprietary  Rights or any item described in any of the
foregoing  paragraphs and any agreements with any other parties to contribute to
the further development of any of the Proprietary Rights; and

                  4)  All  other   intellectual   property   rights   and  legal
protections in every and all countries and jurisdictions owned or claimed by ATC
or any of its affiliates and embodied in or are in any way related to any of the
Proprietary Rights.

         b) "Closing"  shall refer to the time and place at which this Agreement
and all related assignments will be executed by the parties.

         c) "Gross  Revenues  from Sale of Products"  shall include all revenues
actually  received  by ASI from  the sale of any  products  by ASI  wherein  the
Technology is all or a material portion of the product (as customarily agreed to
in such agreements),  but excluding  shipping charges,  quantity,  trade or cash
discounts,  taxes on the  production or sale the legal  incidence of which is on
the  purchaser  of the  product,  credits for returns and  commissions  to third
parties.  "Gross  Revenues from Sale of Products" shall not include any payments
or  fees  from  any  development  contract  with  a  governmental  authority  or
commercial  entity or person  paid  either to ASI or any third  party  licensee,
except for amounts actually received in payment of products  delivered  pursuant
to such a  development  agreement.  In the event that ASI sells a product  which
includes  equipment in addition to the  Technology,  Gross Revenues from Sale of
Products  shall not include  the portion of the amount  received by ASI which is
attributable to such additional equipment.

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         d) If ASI  licenses  or  sublicenses  all  or a  material  portion  (as
customarily  agreed to in such agreements) of the Technology to any third party,
"Gross Revenues from License of Technology"  shall be calculated as all revenues
actually received by ASI from such license or sublicense.

         e) "Gross  Revenues from Sale of Technology"  shall include all amounts
actually  received by ASI from the  subsequent  sale or  assignment  of all or a
portion of the Technology to a third party,  but excluding sales taxes the legal
incidence  of  which  is on the  purchaser  and  brokers  or  finders  fees  and
commissions.

2. Assignment;  Technology Purchase Price. ATC hereby agrees to sell, assign and
transfer,  and at  the  Closing  shall  sell,  assign  and  transfer,  to ASI in
perpetuity (or for the longest period of time otherwise permitted by law) all of
ATC's  right,  title,  interest  and  benefit  in  and  to  the  Technology  and
Proprietary Rights. As full payment for such sale, assignment and transfer,  ASI
agrees to pay ATC an amount  equal to two hundred  thousand  dollars  ($200,000)
(the "Technology  Purchase Price") which the parties agree equals or exceeds the
fair market value of the Technology  and  Proprietary  Rights  determined on the
basis of  arms-length  negotiations.  The  Technology  Purchase  Price  shall be
payable as follows:

         a) ASI agrees to pay the sum of one hundred thousand dollars ($100,000)
to ATC at the Closing of this Agreement.

         b) ASI agrees to pay to ATC the sum of ten thousand  dollars  ($10,000)
per month for 10 consecutive  months.  The first payment shall be due on the 1st
day of the month  following  the Closing.  If there is less than 20 days between
the Closing and the first payment due date,  the first payment may be delayed by
one month.  These payments  shall not bear interest.  Any payment made within 10
days of the due date shall be deemed timely made.

3. Royalty Payments.

         a) Royalty Based on Gross Revenues from Sale of Products In addition to
the Technology Purchase Price described in paragraph 2, ASI agrees to pay to ATC
a royalty as specified below. The calendar year during which ASI makes the first
sale of any product incorporating the Technology and/or Proprietary Rights shall
be called the "first  year".  No royalties  shall be due under this section 3 a)
after the expiration of the Patent.

i) For all sales made during the first year the royalty shall be 6% of the Gross
Revenues  from Sale of  Products.

ii) For all sales made  during the second  year the  royalty  shall be 5% of the
Gross  Revenues  from Sale of Products.

iii) For all sales made during any year after the second year the royalty  shall
be 4% of the Gross Revenues from Sale of Products.

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         b) Royalty  Based on Gross  Revenues  from  License of  Technology.  In
addition to the  Technology  Purchase  Price  described  in  paragraph 2 and the
Royalty Based on Gross Revenues from Sale of Products,  ASI agrees to pay to ATC
a royalty equal to fifteen  percent (15%) of all Gross  Revenues from License of
Technology as defined in paragraph 1 (d) for the life of the patent.

         c) Royalty Based on Gross Revenues from Sale of Technology. In addition
to the Technology  Purchase Price described in paragraph 2 and the Royalty Based
on Gross  Revenues from Sale of Products and the Royalty based on Gross Revenues
from License of  Technology  described in paragraph  3(a & b), in the event that
ASI sells or assigns the  Technology  to any third party  during the life of the
Patent,  ASI agrees to pay to ATC ten percent (10%) of the total  purchase price
actually  received by ASI. If the purchase  price is paid in  installments,  ATC
shall be  entitled  to receive ten  percent  (10%) of each  installment  payment
within fifteen (15) days after the end of the calendar quarter during which such
installment  payment is  actually  received  ASI  (regardless  of  whether  such
installment payment is received after the life of the Patent).

         d) The  parties  agree  that  the  assignments  assigning  the  various
Technology  will not be recorded  with the United  States  Patent and  Trademark
Office until the entire $200,000 Technology Purchase Price has been made to ATC.
To  facilitate  the recording of the  assignments  under these  conditions,  the
parties agree that the original  assignments  will remain in escrow with the law
firm of Thorpe,  North & Western,  attention Vaughn North. Once Thorpe,  North &
Western has been notified that the $200,000  Technology  Purchase Price has been
paid in full to ATC, they will  promptly take the steps  necessary to record the
assignments with confirmation to the parties.

         e)  Royalties  accruing to ATC under this  agreement  shall be computed
quarterly,  with the quarter-annual periods ending on the last day of the months
of March, June, September and December. Within thirty (30) days after the end of
each such  period,  ASI shall  provide  to ATC a written  report,  in a form and
format mutually agreed upon by the parties,  and with, at least, the content set
forth below, and shall pay to ATC all royalties accruing during such period.

                  1)  All  reports  shall  be  in  sufficient  detail  to  allow
confirmation  of the  accuracy  of the  royalty  payment  made and shall show in
detail for the quarter-annual period to which the report pertains.

                  2)  Each  of  the  parties  shall  hold  in   confidence   all
information  reported with respect to royalty  payments,  and shall not disclose
such information to others without written permission of the other party, except
as reasonably  required  internally  for  management  purposes and as reasonably
necessary to comply with applicable laws and government regulations.

                  3)  ASI  shall  keep  true  and  complete  books  and  records
pertaining to its conduct under this Agreement.  Such books and records shall be
in  sufficient  detail  to  enable  royalties  payable  to ATC to be  accurately
determined.  All applicable  books and records shall be kept in accordance  with
generally accepted accounting principles.

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                  4) ASI shall  make  such  books and  records  available,  upon
written  request,   at  reasonable  times  during  regular  business  hours  for
inspection and copying by ATC, or ATC's designated representative,  but not more
than twice each calendar  year,  and supply ATC with the details and  supporting
data  necessary to verify the reports and payments  required by this  Agreement.
Employees,  agents and contractors of ASI charged with  maintaining and assuring
the accuracy of such books and records shall  likewise be made  available to ATC
as reasonably required in connection with such verification.  ASI shall maintain
such books and records for at least five (5) years after the end of the calendar
year to which they pertain.

                  5) If an error of more than two and one-half percent (2.5%) is
discovered  in the total  royalties  due or paid during any one (1) year period,
then the reasonable  costs to ATC of the inspection  discovering the error,  and
subsequent  reasonable costs of remedying the error,  shall be borne by ASI, and
subsequently such inspections shall be allowed more often but not more than four
(4) times each calendar year.

4. Default.

         a) Once ASI has paid the Technology  Purchase Price in full as provided
in paragraph 2, ATC agrees that it will have no claim against ASI for the return
of the  Technology or the  Proprietary  Rights or in voiding or rescinding  this
Agreement and the related assignments.

         b) In the event that ASI fails to pay the Royalty as  required  herein,
ATC agrees that its only remedy is to seek monetary  damages from ASI for unpaid
Royalties.

5. Representations, Warranties and Covenants.

         a) ATC hereby  represents  and warrants to, and covenants  with, ASI as
follows:

                  1) No consents (other than necessary filings in patent offices
wherein  Proprietary Rights have been registered or applications  therefore have
been  filed)  of any  other  parties  are  necessary  or  appropriate  under any
agreements  concerning any of the Technology or the Proprietary  Rights in order
for the transfer and assignment of any of the Technology and Proprietary  Rights
under this Agreement to be legally effective.

                  2) Upon the Close of this  Agreement,  ATC shall have good and
marketable title to the Technology and the Proprietary Rights, free and clear of
any and all liens,  mortgages,  encumbrances,  pledges,  security interests,  or
charges of any nature whatsoever (collectively,  "Liens") and upon final payment
of the $ 100,000  installment  payment as provided above, ASI shall receive good
and  marketable  title to the Technology and the  Proprietary  Rights,  free and
clear of any and all Liens.

                  3) To the best of ATC's  knowledge,  ATC is the sole  owner of
the  entire  right,  title  and  interest  in  and  to the  Technology  and  the
Proprietary  Rights.  The Technology and the Proprietary  Rights are free of all
licenses, sublicenses, royalty or similar payment obligations,

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liens,  mortgages,  encumbrances,  pledges, or security interests, of any nature
whatsoever and are not subject to any outstanding injunction,  judgment,  order,
decree,  ruling,  or charge.  ATC has the right and authority to enter into this
Agreement and to grant the rights  granted  herein.  No facts have come to ATC's
attention  that  would form a basis for the belief  that the  Technology  or the
Proprietary  Rights or any rights  thereunder owned by ATC are  unenforceable or
invalid  and  no  action,  suit,  proceeding,  hearing,  investigation,  charge,
complaint,  claim, or demand is pending or, to the best of ATC's  knowledge,  is
threatened against ATC that challenges the legality,  validity,  enforceability,
use, or ownership of such items.  ATC has not agreed to indemnify any person for
or against any interference,  infringement,  misappropriation, or other conflict
with respect to such items. All material information affecting the patentability
of the claims of the  Technology,  the  Proprietary  Rights  and  patent  rights
thereunder  known to ATC has been  disclosed  to the  United  States  Patent and
Trademark Office and any other governing entity as relate to such rights.  There
have been no transfers, sales, assignments,  licenses or other conveyance of any
rights,  title  or  interest  in or to  such  items  and  none  are  pending  or
contemplated except as otherwise provided herein. The Technology and Proprietary
Rights represent all of the patents,  patent applications,  rights or inventions
created or owned by ATC that relate to the Sound  Reduction  technology.  To the
best of ATC's  knowledge,  the  Technology  and the  Proprietary  Rights and the
processes  represented  by them will  perform the  functions as set forth in the
patents and patent  applications listed in Exhibit A hereto and disclosed by ATC
to ASI, and ATC does not have  knowledge  of any matter that would  prevent such
performance.  To the best of ATC's knowledge, ATC has not, by any of its acts or
acts of its agents, put any of those rights into jeopardy.

                  4) There are no  obligations  for further  work,  development,
reporting or delivery of any items or work product to any government entity.

                  5)  Although  ASI  intends  to  expend  funds to  develop  the
Technology and the Proprietary Rights, ATC acknowledges and agrees that there is
no obligation to do so should ASI decide,  in its sole and absolute  discretion,
that it is not in its business  interest.  Additionally,  ATC  acknowledges  and
agrees that the Technology and the  Proprietary  Rights are not presently  fully
developed or commercially viable. Accordingly, ATC acknowledges that there is no
assurance of any future Royalties.

                  6) ATC  acknowledges  that  ASI  shall  be  free  to  develop,
abandon,  transfer,  sell, license or otherwise deal with the Technology without
consent or claim by ATC other than as otherwise provided in this Agreement.

         b) ASI acknowledges and agrees that it is buying the Technology and the
Proprietary  Rights as is with no assurance of future revenues relating from the
Technology or the Proprietary Rights.

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6. Indemnification.

         a) ATC shall  indemnify,  defend,  and hold harmless ASI against and in
respect of any and all claims,  demands,  losses, costs, expenses,  obligations,
liabilities,   damages,   recoveries,  and  deficiencies,   including  interest,
penalties,  and reasonable attorneys' fees, that ASI shall incur or suffer, that
arise,  result  from,  or  relate to any (i) claim  that the  Technology  or the
Proprietary  Rights as sold,  transferred and assigned by ATC (as  distinguished
from  technologies  or  inventions  originating  with ASI  after  the  Closing )
infringes or misappropriates the intellectual property rights of any third party
or  (ii)  any  breach  of,  or  failure  by  ATC  to   perform,   any  of  their
representations,  warranties,  covenants,  or agreements in this Agreement or in
any  schedule,  certificate,  exhibit,  or other  instrument  furnished or to be
furnished  by ATC under  this  Agreement.  Notwithstanding  the  foregoing,  the
indemnification  obligations of ATC with respect to matters  described in clause
(i) above  shall be  limited in dollar  amount to the  amount of the  Technology
Purchase Price and any Royalties paid or accrued by ASI to ATC.

         b) ASI shall promptly notify ATC of the existence of any claim, demand,
or other matter to which ATC's  indemnification  obligations  would  apply,  and
shall give it a reasonable opportunity to defend the same at its own expense and
with  counsel of its own  selection;  provided  that ASI shall at all times also
have the right to fully  participate  in the defense at its own expense.  If ATC
shall,  within a reasonable  time after this notice,  fail to defend,  ASI shall
have the right,  but not the  obligation,  to  undertake  the defense of, and to
compromise or settle (exercising  reasonable  business  judgment),  the claim or
other matter on behalf,  for the account,  and at the risk, of ATC. If the claim
is one that cannot by its nature be defended solely by ATC  (including,  without
limitation, any federal or state tax proceeding),  then ASI shall make available
all information and assistance that ATC may reasonably request.

7. Miscellaneous Terms.

         a) ATC shall  execute  and  deliver,  from time to time  after the date
hereof upon the request of ASI, such further  conveyance  instruments,  and take
such further  actions,  as may be necessary or desirable to evidence  more fully
the conveyance of interest in and to all the Technology and  Proprietary  Rights
to ASI, on the part of the ASI, to the fullest  extent  possible.  ATC therefore
agrees to:

                  1)  Execute,   acknowledge,  and  deliver  any  affidavits  or
documents  of  assignment  and  conveyance   regarding  the  Technology  or  the
Proprietary Rights;

                  2)  Provide   testimony  in  connection  with  any  proceeding
affecting the right, title, interest, or benefit of ASI to the Technology or the
Proprietary Rights; and

                  3) Perform  any other acts deemed  necessary  to carry out the
intent of this Agreement.

         b) In furtherance  of, but subject to the terms and conditions of, this
Agreement,  ATC hereby acknowledges that, from and after the Closing and payment
in full of the Technology

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Purchase Price,  ASI will have acquired all of ATC's right,  title, and standing
to:

                  1)  Receive  all  rights  and  benefits   pertaining   to  the
Technology and the Proprietary Rights as the sole owner thereof;

                  2) Institute and prosecute all suits and  proceedings and take
all actions that ASI, in its sole  discretion,  may deem  necessary or proper to
collect,  assert, or enforce any claim, right or title of any kind in and to any
and all of the Technology and Proprietary Rights;

                  3) Defend and compromise any and all such actions,  suits,  or
proceedings relating to such transferred and assigned rights,  title,  interest,
and benefits,  and do all other such acts and things in relation  thereto as the
ASI, in its sole discretion, deems advisable; and

                  4) To sell,  assign,  transfer,  modify,  further  develop and
license such rights and receive royalties and other payment for such rights.

         c) The  parties  agree that ATC shall pay all costs and fees (legal and
otherwise)  necessary to maintain or prosecute the patents identified in Exhibit
A through Closing.  After Closing,  the parties agree that ASI will pay all such
costs and fees thereafter.

         d) ATC agrees that ASI may continue retain the services of the law firm
of Thorpe, North & Western, including specifically Vaughn North, to act as ASI's
patent  counsel  subsequent  to the  Closing of this  Agreement  and as such ATC
hereby  waives any  potential  conflict of interest that may exist now or in the
future.

         e) ATC  agrees to assist ASI  during a  Transition  Period of up to one
year from the date of the Closing.  ATC agrees to make ATC employees  reasonably
available to ASI during the one year Transition  Period  following  Closing at a
consulting  rate  equal to 140% of the  gross  hourly  rate  paid by ATC to that
particular employee unless another rate is agreed to by the parties.  ASI agrees
that it will  request any work under this  paragraph  in writing.  ATC agrees to
provide  an  accounting  to ASI weekly of the  amount of work  performed  by ATC
employees and the amount of consulting fees, if any, that may be due.

         f) ATC  acknowledges  that ASI may  intend  to file  additional  patent
applications  related to the Technology as defined herein.  Mr. Elwood G. Norris
is currently a consultant to ASI on other matters and ATC  acknowledges  that he
may continue in this capacity.  ATC further acknowledges that ASI may require or
request the  assistance  of Mr.  Norris in the filing of  additional  patents or
exploiting the Technology and that certain  patentable  concepts  related to the
Technology  may have been invented prior to the date of this Agreement but shall
be the property of ASI. ATC agrees that ASI and Mr. Norris are free to arrange a
consulting  agreement  between ASI and Mr.  Norris  which shall be separate  and
apart from this agreement and shall have no bearing upon or relationship to this
agreement.

         g) ATC and ASI agree that each party shall be responsible for their own
legal and other fees and costs relating to the  preparation  of this  Agreement.
Each party  represents and warrants it has been represented by legal counsel and
that there is no finder or broker involved in this

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transaction.

         h) This Agreement  constitutes the entire agreement between the parties
with respect to the subject  matter  hereof,  and shall  supersede  all previous
communications,  representations, understandings and agreements, whether oral or
written.  This  Agreement  may not be  changed or  modified  except by a written
agreement  signed by both  parties.  This  Agreement  shall be  governed  by and
construed in accordance with the laws of the State of California.  Any action or
suit  related to this  Agreement  shall be brought  exclusively  in the state or
federal  courts  in  California.  In case  any  one or  more  of the  provisions
contained in this Agreement or any application thereof shall be invalid, illegal
or unenforceable in any respect,  the validity,  legality and  enforceability of
the remaining  provisions  contained herein and other applications thereof shall
not in any way be affected or impaired  thereby,  and such  invalidity  shall be
construed and limited as narrowly as practicable.

IN WITNESS  WHEREOF,  the parties have  executed  this  Agreement as of the date
first written above.

Purchaser:                                       Seller:


ASI Technology Corporation                       American Technology Corporation


By: /s/ JERRY E. POLIS                           By: /s/ TERRY CONRAD

Name: Jerry E. Polis                             Name:  Terry Conrad

Title: President                                 Title:  President

Date: Dec 30, 2000                               Date: Dec 30, 2000

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