Document:

Settlement Agreement with John R. Zavoli

 Exhibit 10.40 
 EXECUTION VERSION 
 SEPARATION AND RELEASE AGREEMENT 
 I, John R. Zavoli (“Employee,” “me” or “I”), understand that my position with American Technology Corporation (the
“Company”) was terminated effective August 17, 2006 (the “Separation Date”). 
 The Company has agreed that in
exchange for my signature on this Agreement and the promises and covenants herein, the Company will provide me with the following severance benefits (the “Benefits”): (1) a severance amount equal to five months salary, or $104,166.67,
the portion of which would have otherwise been paid as base salary in calendar year 2006 but for the termination to be paid upon the expiration of the revocation period set forth below, and the balance to be paid on January 2, 2007; (2) an
additional payment of $20,833.33, paid upon the expiration of the revocation period set forth below; (3) payment of health benefit premiums on my behalf until the earlier to occur of my election of health care coverage through my next employer,
or February 28, 2007; (4) payment of $2,000.00, as compensation for my service on the Company’s Board of Directors for August 2006 and up to the date of my resignation during September 2006, and (5) my retention of the laptop
computer which the Company provided to me (which will be surrendered by me to the Company within three days and which will be returned to me within a reasonable time after the Company’s IT department has deleted and imaged all ATC files). All
such Benefits shall be subject to payroll withholding taxes to the extent required under applicable law. 
 I understand that I am not
entitled to the Benefits unless I sign this Agreement within twenty one days after September 22, 2006 (the date this Agreement was first presented to me) and do not revoke this Agreement within the period of time described below. I understand
and agree that in addition to the Benefits, the Company has paid me all of my accrued salary and vacation, to which I am entitled by law. I understand and agree that in addition to the Benefits, pursuant to the terms of my Stock Option Agreement
dated June 14, 2005, I will have until the date which is thirty (30) days following the date I execute this Agreement, to exercise such option to the extent vested on the date I execute this Agreement. Such option is currently, and on the
last day I am may execute this Agreement will be, vested as to 15,625 shares. The exercise price of such option is $6.05 per share. 
 I
understand that my option agreement dated November 1, 2005 will not be vested as to any shares as of the last date I may execute this Agreement, and accordingly, will terminate upon my execution of this Agreement. 
 By my execution of this Agreement, I hereby resign from the Company’s Board of Directors effective immediately. Such resignation is not conditioned
upon the other terms in this Agreement, and will be irrevocable notwithstanding any revocation of this Agreement. 
 In exchange for the
Benefits provided to me by this Agreement that I am not otherwise entitled to receive, I hereby unconditionally and completely release the Company and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors,
successors, parent and subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring
prior to my signing this Agreement. 

 This general release includes, but is not limited to: (1) all claims arising out of or in any way
related to my employment with the Company or the termination of that employment including but not limited to that letter agreement dated October 17, 2005; (2) all claims related to my compensation or benefits from the Company, including
salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach
of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims,
including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination
in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act (as amended) and other analogous state and local laws or regulations. 
 In exchange for the releases and other consideration provided by me through this Agreement, which the Company is not otherwise entitled to receive, the
Company hereby unconditionally and completely releases me, my heirs, agents, attorneys, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct,
or omissions occurring prior to its signing this Agreement, including without limitation, all claims arising out of or in any way related to my employment with the Company. 
 This release does not release claims that cannot be released as a matter of law, including, but not limited to, claims under Division 3, Article 2 of the
California Labor Code (which includes indemnification rights). 
 In giving this release, which includes claims which may be unknown to me at
present, I hereby acknowledge, and the Company acknowledges, that we have read and understand Section 1542 of the Civil Code of the State of California which reads as follows: 
 A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or her settlement with the debtor. 
 Both I and the Company
hereby expressly waive and relinquish all rights and benefits under Section 1542 and any law or legal principle of similar effect in any jurisdiction with respect to claims released hereby. 
 I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the federal Age Discrimination in Employment Act of
1967, as amended (“ADEA”). I also acknowledge that the consideration given for the waiver in the above paragraph is in addition to anything of value to which I was already entitled. I have been advised by this writing, as required by the
ADEA that: (a) my waiver and release do not apply to any claims that may arise after my signing of this Agreement; (b) I should consult with an attorney prior to executing this release; (c) I have twenty-one (21) days within
which to consider thisrelease (although I may choose to voluntarily execute this release earlier); and (d) as set forth in the following paragraph, I have seven (7) calendar days following the execution of this release to revoke the
Agreement. 

 Within three (3) calendar days of signing and dating this Agreement, I agree to deliver the
executed original of this Agreement to Norma Berry, American Technology Corporation, 15378 Avenue of Science, Suite 100 San Diego, California 92128. However, I and the Company acknowledge and agree that I may revoke this Agreement for up to seven
(7) calendar days following my execution of this Agreement and except as otherwise set forth herein, it shall not become effective or enforceable until the revocation period has expired. I and the Company further acknowledge and agree that such
revocation must be in writing addressed to and received by Norma Berry at 15378 Avenue of Science, Ste 100, San Diego, California 92128, not later than midnight on the 7th day following execution of this Agreement by me. Should I revoke this Agreement under this paragraph, this Agreement shall not be effective or enforceable,
except as to my resignation from the Company’s Board of Directors, and I will not receive the Benefits described above. 
 I acknowledge
my continuing obligations under my Employee Nondisclosure Agreement (attached as Exhibit A). Pursuant to the Employee Nondisclosure Agreement I understand that among other things, I must not use or disclose any confidential or proprietary
information of the Company and I must immediately return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in my possession or control. I also acknowledge the Mutual Agreement to
Arbitrate (attached as Exhibit B) between myself and the Company dated November 6, 2005, and agree to that Mutual Agreement to Arbitrate’s validity and application to any disputes arising under this Agreement. I also agree that any
arbitration regarding this Agreement shall take place in San Diego County, California. 
 I agree not to make any statement or take any
action which would damage the reputation or promotion of the Company or its products. Likewise, the Company has agreed not to make any statement or take any action that would damage my reputation in the industry or marketplace. 
 If either I or the Company commences an action against the other party to enforce any of the terms hereof or because of the breach by such other party of
any of the terms hereof, the prevailing party shall be entitled, in addition to any other relief granted, to all actual out-of-pocket costs and expenses incurred by such prevailing party in connection with such action and the enforcement and
collection of any judgment rendered therein, including, without limitation, all reasonable attorneys’ fees, consultant fees and expert witness fees. 
 This Agreement, including Exhibits A and B hereto, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying
on any promise or representation by the Company that is not expressly stated herein. This Agreement may only be modified by a writing signed by both me and a duly authorized officer of the Company. 
  

 The undersigned accept and agree to the terms and conditions stated above: 
  

							
	 Sept. 22, 2006
	 		 	 /s/    John R.
Zavoli        

	 Date
	 		 	John R. Zavoli
			
		 		 	FOR AMERICAN TECHNOLOGY CORPORATION
				
	 September 29, 2006
	 		 	By:	 	 /s/    Thomas R. Brown        

	Date	 		 	Title:	 	 President/CEOSettlement Agreement with Alan J. Ballard

 Exhibit 10.41 
 RELEASE AND SETTLEMENT AGREEMENT 
 This RELEASE AND SETTLEMENT AGREEMENT
(“Agreement”) is made and entered into this 18 day of October 2006, by and between: 
 1. Alan J. Ballard
(“Ballard”), an individual who resides in Topsham, Maine, 
 2. American Technology Corporation, (“ATC”), a
corporation organized under the laws of California with its principal executive offices in San Diego, California. [Collectively, Ballard and ATC shall be referred to herein as the “Parties.”] 
 WHEREAS, ATC formerly employed Ballard in ATC’s government military division; 
 WHEREAS, ATC terminated Ballard’s employment in May 2006; 
 WHEREAS, in connection with Ballard’s employment, and the termination of that employment, various disputes (“the Disputes”) have arisen between the Parties, including but not limited to the lawsuit
filed by Ballard against ATC which is currently pending in Sagadahoc County Superior Court, captioned Alan J. Ballard v. American Technology Corporation, CV-06 (“the Litigation”); 
 WHEREAS, the Parties desire to resolve the Disputes, and all issues raised by or that could have been raised by the Disputes, without the further
expenditure of time or the expense of contested litigation. Additionally, the Parties desire to resolve any known or unknown claims as more fully set forth below. For these reasons, the Parties have entered into this Agreement; 
 WHEREAS, ATC expressly denies any violation of any federal, state or local statute, ordinance, rule, regulation, policy, order or other law. ATC also
expressly denies any liability to Ballard. This Agreement is the compromise of disputed claims and nothing 

 contained herein is to be construed as an admission of liability on the part of the parties hereby released, by whom
liability is expressly denied. Accordingly, while this Agreement resolves all issues referenced herein, it does not constitute an adjudication or finding on the merits of the allegations in the Disputes and it is not, and shall not be construed as,
an admission by ATC of any violation of federal, state or local statute, ordinance, rule, regulation, policy, order or other law, or of any liability alleged in the Disputes; 
 NOW THEREFORE, the parties agree to settle said claims pursuant to the terms of this Agreement, as set forth below. 
 1. Payment to Ballard 
 In consideration
of and in return for the promises and covenants undertaken by ATC and Ballard herein and the releases given by Ballard and ATC herein: 
 a.
ATC shall pay Ballard the total gross sum of $90,000.00 (the “Payment”). The Payment shall be allocated as follows: 
 1) $36,250
shall be allocated as severance pay and will be subject to standard tax withholdings and customary payroll deductions. ATC will issue to Ballard a W-2 statement for this portion of the Payment. 
 2) The balance of $53,750.00 shall be allocated as non-wage damages, including but not limited to emotional distress, damages to Ballard’s
reputation, attorneys’ fees and costs. ATC shall issue a 1099 form for this portion of the Payment. 
 b. The Payment shall be made by
check payable to Ballard. 
 c. The Payment shall be delivered to Ballard within seven (7) days of the Effective Date of this Agreement.

 d. Ballard agrees that the Payment made to Ballard under this Agreement constitutes adequate consideration and is more than ATC is
required to pay Ballard under its plans, policies, and procedures. The Parties confirm Ballard would not be entitled to the Payment set forth in this Section 1 if Ballard did not sign this Agreement. 
  

 2. Mutual Releases 
 a. Except for any rights or claims created by this Agreement, in consideration of and in return for the promises and covenants undertaken herein by ATC, and for other good and valuable consideration, receipt of which
is hereby acknowledged: Ballard, for himself and anyone who may claim through him, including but not limited to his heirs, successors, and assigns, does hereby irrevocably and unconditionally remise, release, and forever discharge ATC, and all
ATC’s current and former agents, employees, representatives, attorneys, insurers, related entities and the predecessors, successors and assigns of all of them, and all persons acting by, through, under or in concert with any of them
(hereinafter collectively referred to as “Releasees”), of and from any and all actions, causes of action, suits, liabilities, defenses, claims, demands and expenses (including all costs and attorneys’ fees) of any nature whatsoever,
both at law and in equity, whether known or unknown, which have accrued on or prior to the date of this Agreement, including specifically but not exclusively and without limiting the generality of the foregoing, any and all claims, demands,
grievances, agreements, obligations and causes of action, known or unknown, suspected or unsuspected: (1) arising out of or in any way connected with the Disputes; (2) arising out of Ballard’s employment with ATC; (3) arising out
of or in any way connected with the Litigation; or (4) arising out of or in any way connected with any claim, loss, damage or injury whatever, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of
the Releasees, or any of them, committed or omitted on or before the Effective Date hereof. 
  

 b. Except for any rights or claims created by this Agreement, in consideration of and in return for the
promises and covenants undertaken herein by Ballard, and for other good and valuable consideration, receipt of which is hereby acknowledged: ATC, for itself and anyone who may claim through it, including but not limited to its heirs, successors, and
assigns, does hereby irrevocably and unconditionally remise, release, and forever discharge Ballard, and all Ballard’s current and former agents, employees, representatives, attorneys, insurers, related entities and the predecessors, successors
and assigns of all of them, and all persons acting by, through, under or in concert with any of them (hereinafter collectively referred to as “Releasees”), of and from any and all actions, causes of action, suits, liabilities, defenses,
claims, demands and expenses (including all costs and attorneys’ fees) of any nature whatsoever, both at law and in equity, whether known or unknown, which have accrued on or prior to the date of this Agreement, including specifically but not
exclusively and without limiting the generality of the foregoing, any and all claims, demands, grievances, agreements, obligations and causes of action, known or unknown, suspected or unsuspected: (1) arising out of or in any way connected with
the Disputes; (2) arising out of Ballard’s employment with ATC; (3) arising out of or in any way connected with the Litigation; or (4) arising out of or in any way connected with any claim, loss, damage or injury whatever, known
or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of the Releasees, or any of them, committed or omitted on or before the Effective Date hereof. 
 The mutual releases under this paragraph 2 do not apply to any claim which as a matter of law cannot be released. 
  

 3. Consideration  
 The Parties acknowledge that the promises contained herein are good and sufficient consideration for this Agreement and further warrant that they will not interpose failure of consideration as a defense to an action
to enforce this Agreement. 
 4. Dismissal of Claims and Forbearance from Litigation 
 Ballard hereby agrees that within seven (7) days of receipt of the Payment under this Agreement, Ballard will take all actions necessary to dismiss,
with prejudice and without costs or attorney’s fees, his claims against ATC that are currently pending in the Litigation. 
 Ballard
further covenants, promises and agrees that neither he nor any person, organization or other entity acting on his behalf will file, charge, claim, sue or cause or permit to be filed any charge, claim or action for damages or other relief against ATC
or the Releasees involving any matter or based upon any claims, demands, causes of action, defenses, obligations, damage or liabilities which are the subject of this Agreement, other than to enforce this Agreement. 
 5. Nondisclosure and confidentiality 
 A.
EMPLOYEE and EMPLOYER acknowledge the receipt and sufficiency of the consideration, mutual promises, agreements and undertakings as set forth herein. 
 B. For purposes of this Section 5, “EMPLOYER” is defined as and limited to those who are authorized and recognized as having actual authority in an official capacity to speak for and on behalf of ATC.

 C. For purposes of this Section 5, “EMPLOYEE” is defined as Ballard and his spouse. 
  

 D. EMPLOYEE and EMPLOYER agree to keep the terms of this settlement agreement confidential and agree that
they and their representatives will not comment upon or discuss in any manner EMPLOYEE’s claims against EMPLOYER with any third-parties, other than their respective attorneys, including but not limited to any public or news medium, except as
set forth in paragraph E below. The parties’ respective attorneys, David Perkins, Esq. for EMPLOYEE and Preti, Flaherty, Beliveau, & Pachios, LLP for EMPLOYER, by their signatures on this Agreement, represent that they and all their
employees will adhere to all the terms of this Agreement’s Nondisclosure and Confidentiality Section herein. 
 E. The parties further
agree that neither they nor their respective attorneys will acknowledge or comment upon the existence of a settlement agreement with respect to EMPLOYEE’s claims. Any and all comments by the parties hereto to third parties shall be limited in
all circumstances to “The matter has been resolved” or “The matter was resolved.” 
 F. In the event that EMPLOYEE,
EMPLOYER, or their respective attorneys become legally compelled to disclose any of the “information” (whether by oral questions, interrogatories, requests for information or documents, subpoena, regulatory investigation or similar process
or otherwise), EMPLOYEE, EMPLOYER and/or their respective attorneys will provide the other parties hereto with prompt notice, to the extent practicable, so that EMPLOYEE, EMPLOYER and/or their respective attorneys may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this Agreement. In the event that such protective order or other remedy is not obtained, EMPLOYEE, EMPLOYER, and their respective attorneys agree that such disclosure may be
made without liability hereunder. EMPLOYEE, EMPLOYER and/or their respective attorneys will furnish only that information which the requested party and/or her/its attorneys are legally required to disclose and will use all efforts to obtain reliable
assurance that confidential treatment will be accorded the information. 
  

 G. To the extent that EMPLOYEE is obligated to share the financial terms of this Agreement with an
accountant or other financial professional in order to determine tax liability only, EMPLOYEE is responsible for advising such accountant or financial professional of her/her obligation to adhere to the terms of the nondisclosure and confidentiality
provisions of Section 5 of this Agreement. Any breach thereof by such accountant or tax professional will be considered a breach by EMPLOYEE and EMPLOYER shall be entitled to seek remedies consistent with Section 5 of this Agreement.

 H. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provisions in any other jurisdiction. 
 I. The parties and their respective attorneys acknowledge and agree that, in the event of any breach of this Agreement generally, and Section 5
specifically, that the other party would be irreparably and immediately harmed and could not be made whole by monetary damages. However, it is agreed that, in addition to any other remedy to which EMPLOYER or EMPLOYEE may be entitled in law or
equity, the wronged party shall be entitled to: 
 a. Liquidated damage award for a violation of Section 5 in the amount of Ten Thousand
Dollars ($10,000.00). 
 b. The wronged party is also entitled to an injunction or injunctions (without posting bond and without proof of
actual damages) to prevent breaches or anticipated breaches of Section 5 and/or to compel specific performance of Section 5. Neither the 
  

 offending party nor the attorneys or representatives thereof will oppose in any manner, including appeal, the relief
granted, if any, by the court of competent jurisdiction granting such relief. The offending party shall also reimburse the wronged party for all costs and expenses, including attorneys’ fees, as determined by the court of competent
jurisdiction, incurred by the wronged party in attempting to enforce the obligations of the offending party and/or the attorneys or representatives hereunder. The wronged party shall exercise such rights, powers and privileges contained specifically
in Section 5 within one (1) year of the wronged party becoming aware of the occurrence of the alleged breach by the offending party. 
 J. By executing this Agreement, EMPLOYEE affirms that he has read the confidentiality provisions of this Agreement, that he has discussed the confidentiality provisions of this Agreement with his attorney and that he understands the nature,
terms, scope, and effect of the confidentiality provisions of this Agreement. 
 K. By signing this document below, EMPLOYEE’s attorney,
David Perkins, Esq., warrants that he has explained the meaning and operation of all terms of this Agreement to EMPLOYEE and that he believes that EMPLOYEE understands his obligations under this Agreement and the consequences of his breach of the
confidentiality provisions of this Agreement. 
 L. No failure or delay by EMPLOYEE or EMPLOYER in exercising any respective rights, powers,
or privileges hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such rights, powers, or privileges preclude any other or further exercise thereof. 
  

 Miscellaneous Provisions 
 5. This document is deemed to have been executed and delivered within the State of Maine, and the rights and obligations of the Parties hereto shall be construed and enforced in accordance with, and governed by, the
laws of the State of Maine without regard to conflict of law rules. 
 6. Ballard agrees and understands that this Agreement may be treated as a complete
defense to any legal, equitable, or administrative action that my be brought, instituted, or taken by Ballard, or on Ballard’s behalf, against ATC or the Releasees, and shall forever be a complete bar to the commencement or prosecution of any
claim, demand, lawsuit, charge, or other legal proceeding of any kind against ATC and the Releasees. 
 7. This Agreement and all covenants and releases set
forth herein shall be binding upon and shall inure to the benefit of the respective Parties hereto, their legal successors, heirs, assigns, partners, representatives, parent companies, subsidiary companies, agents, attorneys, officers, employees,
directors and shareholders. 
 8. The Parties hereto acknowledge each has read this Agreement, that each fully understands its rights, privileges and duties
under the Agreement, that each has had an opportunity to consult with an attorney of its choice and that each enters this Agreement freely and voluntarily. 
  

 9. The undersigned each acknowledge and represent that no promise or representation not contained in this Agreement has
been made to them and acknowledge and represent that this Agreement contains the entire understanding between the Parties and contains all terms and conditions pertaining to the compromise and settlement of the subjects referenced herein. The
undersigned further acknowledge that the terms of this Agreement are contractual and not a mere recital. 
 10. This Agreement may not be released,
discharged, abandoned, changed or modified in any manner, except by an instrument in writing signed by Ballard and an officer of ATC. The failure of any Party to enforce at any time any of the provisions of this Agreement shall in no way be
construed as a waiver of any such provision, nor in any way to affect the validity of this Agreement or any part thereof or the right of any Party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement shall
be held to be a waiver of any other or subsequent breach. 
 11. This Agreement and the provisions contained herein shall not be construed or interpreted for
or against any party hereto because that party drafted or caused that party’s legal representative to draft any of its provisions. 
 12. In the event
of litigation arising out of or relating to this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs. 
  

 13. Ballard acknowledges Ballard may hereafter discover facts different from, or in addition to, those Ballard now knows
or believes to be true with respect to the claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action, wages, obligations, debts, expenses, damages, judgments, orders and liabilities herein released, and agrees the
release herein shall be and remain in effect in all respects as a complete and general release as to all matters released herein, notwithstanding any such different or additional facts. 
 14. This Agreement irrevocably and forever extinguishes all of the claims referenced in Paragraph 2 hereof and such matters cannot be revived in any way, including but not limited to, by any alleged breach of this
Agreement. The Parties’ remedy for any such alleged breach shall be limited exclusively to money damages for breach of the Agreement. 
 15. ATC hereby
advises Ballard in writing to discuss this Agreement with an attorney before signing it. Ballard acknowledges ATC has provided Ballard at least twenty-one days within which to review and consider this Agreement before signing it. Should Ballard
decide not to use the full twenty-one days, then Ballard knowingly and voluntarily waives any claim that Ballard was not in fact given that period of time or did not use the entire twenty-one days to consult an attorney and/or consider this
Agreement. 
 16. Within three calendar days of signing and dating this Agreement, Ballard shall deliver the signed original of this Agreement to David
Chidlaw, Esq., 501 West Broadway, San Diego, CA 92101. However, the Parties acknowledge and agree that Ballard may revoke this Agreement 
  

 for up to seven calendar days following Ballard’s execution of this Agreement and that it shall not become effective
or enforceable until the revocation period has expired. The Parties further acknowledge and agree that such revocation must be in writing addressed to and received by David Chidlaw, Esq. not later than midnight on the seventh day following execution
of this Agreement by Employee. If Ballard revokes this Agreement under this Paragraph, this Agreement shall not be effective or enforceable and Ballard will not receive the monies and benefits described above, including those described in Paragraph
1. 
 17. If Ballard does not revoke this Agreement in the timeframe specified in Paragraph 16 above, the Agreement shall be effective at 12:00:01 a.m. on
the eighth day after it is signed by Ballard (the “Effective Date”). 
 18. This Agreement may be signed in several counterparts, but all when
taken together shall constitute but a single document when executed by all parties. This Agreement shall not constitute the agreement of the parties until such time as all parties have executed it. 
  

	19.	ATC executes this Agreement for itself and on behalf of all other respective Releasees. 

 20. Should any provision of this Agreement be declared or be determined to be invalid, the validity of the remaining parts, terms and provisions shall not be affected thereby and said invalid part, term or provision
shall be deemed not to be part of this Agreement. To this end, the provisions of this Agreement are severable. 
  

 21. CIRCULAR 230 DISCLAIMER. EACH PARTY TO THIS AGREEMENT (FOR PURPOSES OF THIS SECTION, THE “ACKNOWLEDGING
PARTY”; AND EACH PARTY TO THIS AGREEMENT OTHER THAN THE ACKNOWLEDGING PARTY, AN “OTHER PARTY”) ACKNOWLEDGES AND AGREES THAT (1) NO PROVISION OF THIS AGREEMENT, AND NO WRITTEN COMMUNICATION OR DISCLOSURE BETWEEN OR AMONG THE
PARTIES OR THEIR ATTORNEYS AND OTHER ADVISERS, IS OR WAS INTENDED TO BE, NOR SHALL ANY SUCH COMMUNICATION OR DISCLOSURE CONSTITUTE OR BE CONSTRUED OR BE RELIED UPON AS, TAX ADVICE WITHIN THE MEANING OF UNITED STATES TREASURY DEPARTMENT CIRCULAR 230
(31 CFR PART 10, AS AMENDED); (2) THE ACKNOWLEDGING PARTY (A) HAS RELIED EXCLUSIVELY UPON HER OR ITS OWN, INDEPENDENT LEGAL AND TAX ADVISERS FOR ADVICE (INCLUDING TAX ADVICE) IN CONNECTION WITH THIS AGREEMENT, (B) HAS NOT ENTERED INTO
THIS AGREEMENT BASED UPON THE RECOMMENDATION OF ANY OTHER PARTY OR ANY ATTORNEY OR ADVISOR TO ANY OTHER PARTY, AND (C) IS NOT ENTITLED TO RELY UPON ANY COMMUNICATION OR DISCLOSURE BY ANY ATTORNEY OR ADVISER TO ANY OTHER PARTY TO AVOID ANY TAX
PENALTY THAT MAY BE IMPOSED ON THE ACKNOWLEDGING PARTY; AND (3) NO ATTORNEY OR ADVISER TO ANY OTHER PARTY HAS IMPOSED ANY LIMITATION THAT PROTECTS THE CONFIDENTIALITY OF ANY SUCH ATTORNEY’S OR ADVISER’S TAX STRATEGIES (REGARDLESS OF
WHETHER SUCH LIMITATION IS LEGALLY BINDING) UPON DISCLOSURE BY THE ACKNOWLEDGING PARTY OF THE TAX TREATMENT OR TAX STRUCTURE OF ANY TRANSACTION, INCLUDING ANY TRANSACTION CONTEMPLATED BY THIS AGREEMENT. 
  

 IN WITNESS WHEREOF, the said Ballard, and ATC , having read the foregoing Agreement carefully, and
knowing and understanding its contents and effects, sign and seal the same through their agents as their own free act and deed. 
  

 I. PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. 
 ALAN J. BALLARD ACKNOWLEDGES AND AGREES: 
 THAT HE
HAS BEEN ADVISED AND ENCOURAGED TO REVIEW THIS AGREEMENT WITH AN ATTORNEY BEFORE SIGNING IT; AND THAT HE IS VOLUNTARILY AND KNOWINGLY ENTERING INTO THIS AGREEMENT. 
  

					
	 DATED: October 18, 2006
	 		 	 /s/ Alan J. Ballard

		 		 	 Alan J. Ballard

			
	 STATE OF Maine
	 		 	

  

			
	 Cumberland, ss.
	  	October 18, 2006

 Personally appeared the above-named Alan J. Ballard and made oath that he has carefully read and
fully understands the foregoing Release and Settlement Agreement and it is signed by her as his own free act and deed. 
  

					
	 Before me,
	 		 	 /s/ Rebecca J. Morton

		 		 	 Notary Public/Attorney at Law

  

 II. PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. 
 THOMAS R. BROWN, ACTING AS ATC’S DULY AUTHORIZED REPRESENTATIVE, ACKNOWLEDGES AND AGREES: 
 THAT HE HAS BEEN ADVISED AND ENCOURAGED TO REVIEW THIS AGREEMENT WITH AN ATTORNEY BEFORE SIGNING IT; AND 
 THAT IT IS VOLUNTARILY AND KNOWINGLY ENTERING INTO THIS AGREEMENT. 
  

							
	 DATED: 10/24/06
	 		 	  
	 	
				
		 		 	 /s/ Thomas R. Brown
	 	 ,

		 		 	President, American Technology Corporation	 	
				
	 STATE OF California
	 		 		 	
				
	 San Diego, ss.
	 		 	October 24, 2006	 	

  

 Personally appeared the above-named Thomas R. Brown and made oath that he has carefully read and fully
understands the foregoing Release and Settlement Agreement and it is signed by him as his own free act and deed. 
  

					
	 Before me,
	 		 	 /s/ Cheryl Young Nielsen

		 		 	 Notary Public/Attorney at Law

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