<SEC-DOCUMENT>0001193125-13-231665.txt : 20130522
<SEC-HEADER>0001193125-13-231665.hdr.sgml : 20130522
<ACCEPTANCE-DATETIME>20130522172049
ACCESSION NUMBER:		0001193125-13-231665
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20130521
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
ITEM INFORMATION:		Shareholder Nominations Pursuant to Exchange Act Rule 14a-11
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20130522
DATE AS OF CHANGE:		20130522

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LRAD Corp
		CENTRAL INDEX KEY:			0000924383
		STANDARD INDUSTRIAL CLASSIFICATION:	HOUSEHOLD AUDIO & VIDEO EQUIPMENT [3651]
		IRS NUMBER:				870361799
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24248
		FILM NUMBER:		13865666

	BUSINESS ADDRESS:	
		STREET 1:		16990 GOLDENTOP RD., STE. A
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92127
		BUSINESS PHONE:		858-676-1112

	MAIL ADDRESS:	
		STREET 1:		16990 GOLDENTOP RD., STE. A
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92127

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERICAN TECHNOLOGY CORP /DE/
		DATE OF NAME CHANGE:	19940602
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d543170d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>FORM 8-K</TITLE>
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 <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="margin-top:4px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>UNITED STATES </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>WASHINGTON, D.C. 20549 </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>FORM 8-K
</B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>CURRENT REPORT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>Pursuant to Section&nbsp;13 or 15(d) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>of the Securities Exchange Act of
1934 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>Date of Report (Date of earliest event reported): May&nbsp;21, 2013 </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="6"><B>LRAD Corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>(Exact name of registrant as specified in its charter) </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Delaware</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>000-24248</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>87-0361799</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(State or Other Jurisdiction</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>of Incorporation)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Commission</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>File Number)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(I.R.S. Employer</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Identification No.)</B></FONT></P></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>16990 Goldentop Road </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>San Diego, California 92127 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Address of Principal Executive Offices)
</B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>858-676-1112 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>(Registrant&#146;s telephone number, including area code) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>N/A
</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Former name or former address, if changed since last report.) </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#120;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14.a-12) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </FONT></TD></TR></TABLE>
<P STYLE="font-size:8px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P>

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<TD WIDTH="10%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;1.01</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Entry into a Material Definitive Agreement </B></FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">On May&nbsp;21, 2013, LRAD Corporation (the &#147;Company&#148;) entered into an agreement (the &#147;Settlement Agreement&#148;) with Iroquois Master
Fund Ltd. and certain of its affiliates (collectively, &#147;Iroquois&#148;) to settle a potential proxy contest pertaining to the election of directors to the Company&#146;s Board of Directors (the &#147;Board&#148;) at its 2013 annual meeting of
stockholders (the &#147;2013 Annual Meeting&#148;). Pursuant to the Settlement Agreement: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Board will nominate Thomas R. Brown, Laura M. Clague, General John G. Coburn, Dennis J. Wend and Richard H. Osgood III for election at the 2013
Annual Meeting, will recommend a vote for the nominees and solicit proxies for the election of the nominees at the 2013 Annual Meeting. The Company also agreed to hold the 2013 Annual Meeting no later than July&nbsp;31, 2013.
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Iroquois agreed to irrevocably withdraw its letter to the Company expressing an intention to nominate director candidates (the &#147;Nomination
Letter&#148;), and the Company agreed to pay to Iroquois its legal and advisory fees in connection with the Nomination Letter, up to a maximum of $301,496. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Iroquois agreed to vote at the 2013 Annual Meeting in favor of the Board nominees and for the other matters recommended by the Board for stockholder
approval. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Iroquois agreed to customary standstill restrictions during the period beginning on the date of the Settlement Agreement and ending on the earlier of
(a)&nbsp;ten (10)&nbsp;business days prior to the deadline for submission of stockholder nominations for the Company&#146;s 2014 annual meeting and (b)&nbsp;such date, if any, as the Company breaches the Settlement Agreement and such breach has not
been cured within fifteen (15)&nbsp;days following written notice of such breach (the &#147;Standstill Period&#148;). </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">If either General Coburn or Mr.&nbsp;Wend is unable to serve on the Board or resigns from the Board (for any reason other than following a breach of
the Settlement Agreement by Iroquois or its affiliates) during the Standstill Period, Iroquois is entitled to designate a replacement nominee to be approved by the Nominating and Corporate Governance Committee and appointed to the Board.
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company and Iroquois agreed to execute a Stipulation of Settlement seeking to settle the derivative litigation brought by Iroquois in July 2012
(the &#147;Delaware Litigation&#148;), to cooperate in the prompt submission of the Stipulation of Settlement for approval by the Delaware Court hearing the Delaware Litigation, and if the Stipulation of Settlement is not approved, to work
collaboratively to obtain approval of the settlement of the Delaware Litigation. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Iroquois released Helen C. Adams, Admiral Raymond C. Smith and George W. VanDeWeghe, Jr., current members of the Board who have agreed not to stand for
re-election, from any claims related to the Delaware Litigation, the Nomination Letter or the Schedule 13D filed by Iroquois. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The foregoing summary of the Settlement Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of
the Settlement Agreement, which is attached as Exhibit 10.1 hereto and incorporated herein by reference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">On May&nbsp;22, 2013, the Company
issued a press release announcing the signing of the Settlement Agreement. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K. </FONT></P>

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<TD WIDTH="10%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;5.02</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
</B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">As described under Item&nbsp;1.01 above, pursuant to the Settlement Agreement, the Company has agreed to nominate two
current directors of the Company, Thomas R. Brown and Laura M. Clague, and three new nominees, General John G. Coburn, Dennis J. Wend and Richard H. Osgood III, for election as directors at the 2013 Annual Meeting. Helen C. Adams, Admiral Raymond C.
Smith and George W. VanDeWeghe, Jr., current members of the Board, have agreed as part of the Settlement Agreement not to stand for re-election. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">As part of the settlement of the Delaware Litigation, Thomas R. Brown, President and Chief Executive Officer of the Company, has agreed to increase the exercise price of the option granted to
Mr.&nbsp;Brown in May&nbsp;2012 to $3.00 per share. The exercise price will be increased within three (3)&nbsp;business days after the settlement of the Delaware Litigation is approved by the Delaware Court. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="10%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;5.08</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Shareholder Director Nominations. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">On
May&nbsp;21, 2013, the Board established July&nbsp;17, 2013 as the date of the 2013 Annual Meeting. The Board also established May&nbsp;24, 2013 as the record date for stockholders entitled to receive notice of, and to vote at, the 2013 Annual
Meeting. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Because the 2013 Annual Meeting will be held more than 30 calendar days from the date of the Company&#146;s 2012 annual meeting, the
Company has established a new deadline for the receipt of stockholder proposals submitted pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), for inclusion in the Company&#146;s proxy
materials for the 2013 Annual Meeting. In order to be considered timely, such proposals must be received at the Company&#146;s principal executive offices at 16990 Goldentop Road, Suite A, San Diego, California 92127, Attention: Corporate Secretary,
no later than the close of business on June&nbsp;1, 2013, and must also comply with Rule 14a-8 under the Exchange Act regarding the inclusion of stockholder proposals in company-sponsored proxy materials. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Additionally, in accordance with the advance notice provisions set forth in the Company&#146;s bylaws, in order for other business to be brought before
the 2013 Annual Meeting outside of Rule 14a-8 under the Exchange Act, it must be received at the Company&#146;s principal executive offices no later than the close of business on June&nbsp;1, 2013, and must also comply with the provisions set forth
in the Company&#146;s bylaws and applicable law. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;9.01 Financial Statements and Exhibits </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Exhibits</U>. </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Investors Settlement Agreement, dated May&nbsp;21, 2013, by and among LRAD Corporation and the investors listed therein</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">99.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Press Release, dated May 22, 2013, issued by LRAD Corporation</FONT></TD></TR>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SIGNATURES </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Date: May&nbsp;22, 2013 </FONT></P><DIV ALIGN="right">
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<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">LRAD Corporation</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Katherine H. McDermott</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Katherine H. McDermott</FONT></TD></TR>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR>
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<DESCRIPTION>EX-10.1
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.1 </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="right"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>FOR SETTLEMENT DISCUSSIONS ONLY </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>EXECUTION VERSION </I></B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Subject to Delaware Evidence Code 408 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><U>STRICTLY CONFIDENTIAL </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>INVESTORS SETTLEMENT AGREEMENT
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This INVESTORS SETTLEMENT AGREEMENT is made and entered into as of May&nbsp;21, 2013 (the &#147;<U>Agreement</U>&#148;)
by and among LRAD Corporation, a Delaware corporation (the &#147;<U>Company</U>&#148;), and each of the other parties listed on the signature page hereto (each, an &#147;<U>Investor</U>&#148; and collectively, the &#147;<U>Investors</U>&#148;). The
Company and the Investors are referred to herein as the &#147;<U>Parties</U>.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, the Investors beneficially own
the number of shares of the Company&#146;s common stock, par value $0.00001 per share (the &#147;<U>Common Stock</U>&#148;) listed on <U>Exhibit A</U> hereto; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, on July&nbsp;23, 2012, Iroquois Master Fund, Ltd. (&#147;<U>Iroquois</U>&#148;) filed a derivative action in the Court of Chancery of the State of Delaware against certain officers and directors
of the Company and the Company as a nominal defendant (the &#147;<U>Delaware Litigation</U>&#148;); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, on
January&nbsp;17, 2013, Iroquois, on behalf of the Investors, delivered a letter to the Company expressing an intention to nominate director candidates (the &#147;<U>Nomination Letter</U>&#148;) for election to the Company&#146;s Board of Directors
(the &#147;<U>Board</U>&#148;) at the Company&#146;s 2013 annual meeting of stockholders (including any adjournment thereof, the &#147;<U>2013 Annual Meeting</U>&#148;); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, the Company and the Investors have reached an agreement with respect to the settlement of the Delaware Litigation, certain matters related to the 2013 Annual Meeting, including the Nomination
Letter, and certain other matters, as provided in this Agreement; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">NOW, THEREFORE, in consideration of the premises and mutual
covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;1. <U>Board of Directors Matters</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) The Investors and the Company hereby acknowledge and agree that: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) The
Nominating and Corporate Governance Committee (or a duly constituted subcommittee thereof) (the &#147;<U>Nominating Committee</U>&#148;) of the Board will recommend for nomination and the Board will nominate Thomas R. Brown and Laura M. Clague (the
&#147;<U>Continuing Directors</U>&#148;), General John G. Coburn and Dennis J. Wend (the &#147;<U>Investor Directors</U>&#148;) and Richard H. Osgood III (collectively, the &#147;<U>2013 Nominees</U>&#148;) for election at the 2013 Annual Meeting
and will recommend a vote for the 2013 Nominees and solicit proxies from the Company&#146;s stockholders for the election of the 2013 Nominees at the 2013 Annual Meeting. The Company agrees that it shall hold the 2013 Annual Meeting no later than
July&nbsp;31, 2013. If for any reason any of the Investor Directors or Mr.&nbsp;Osgood shall die or withdraw as a nominee </FONT></P>

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prior to election, a replacement nominee proposed by the Investors and reasonably acceptable to the Company shall be substituted consistent with the provisions of clause (ii)&nbsp;hereof.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) To the extent an Investor Director resigns for any reason other than pursuant to <U>Section&nbsp;5</U> or is otherwise
unable to serve as a director or is removed as a director by the stockholders of the Company, in each case, during the Standstill Period, the Investors shall be entitled to designate, for consideration by the Nominating Committee as a replacement
for such Investor Director, an individual who (A)&nbsp;qualifies as &#147;independent&#148; under the Nasdaq corporate governance standards, (B)&nbsp;has relevant business and financial experience, and (C)&nbsp;is qualified to serve as a director
under the Delaware General Corporation Law (the &#147;<U>DGCL</U>&#148;). The Nominating Committee, consistent with its fiduciary duties, shall consider such candidate within ten (10)&nbsp;business days after a completed customary director and
officer questionnaire has been received by the Nominating Committee, and the Board shall appoint such candidate if approved by the Nominating Committee (whose approval and appointment shall not be unreasonably withheld) within five (5)&nbsp;business
days (any such replacement director appointed in accordance with the provisions of this <U>Section&nbsp;1(a)(iii)</U> shall be referred to as an &#147;Investor Director&#148; for the purposes of this Agreement). In the event the Nominating Committee
shall decline to recommend any candidate designated by the Investors, the Investors may propose one or more replacement designees, subject to the above criteria. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) Upon execution of this Agreement, the Investors hereby irrevocably withdraw the Nomination Letter. Upon execution of this Agreement, the Company will promptly pay to the Investors their legal and
advisory fees in connection with the Nomination Letter and this Agreement, invoices for which have been previously provided to the Company. For the avoidance of doubt, such legal and advisory fees shall not exceed $301,496. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;2. <U>Voting Agreement</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) At the 2013 Annual Meeting, the Investors agree to appear in person or by proxy and vote all shares of Common Stock beneficially owned by each Investor and its Affiliates in favor of (i)&nbsp;the
election of the 2013 Nominees and (ii)&nbsp;the following other matters recommended for stockholder approval by the Board: (A)&nbsp;ratification of the appointment of the Company&#146;s independent registered public accounting firm and (B)&nbsp;an
advisory vote on the compensation of the Company&#146;s named executive officers. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) At any subsequent annual or special
meeting of stockholders of the Company (or adjournments thereof) during the Standstill Period (as defined below), the Investors agree to vote all shares of Common Stock beneficially owned by each Investor and its Affiliates in favor of the election
to the Board of those director nominees nominated for election by the Nominating Committee or the Board and against the removal of any directors whose removal is not recommended by the Board. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Each Investor agrees to, within ten (10)&nbsp;business days after receipt, execute and deliver to the Company, or cause to be
executed and delivered to the Company, the proxy card sent to the Investors by the Company in connection with the 2013 Annual Meeting and any subsequent annual or special meeting of stockholders of the Company (or adjournments thereof) during the
Standstill Period (and any other legal proxies delivered to the Investors </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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required to vote any shares held in &#147;street name&#148;) directing that the shares of Common Stock beneficially owned by such Investor, as of the applicable record date, be voted in
accordance with <U>Section&nbsp;2(a)</U> and<U> Section&nbsp;2(b)</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;3. <U>Standstill</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Each Investor agrees that, from the date of this Agreement until the expiration of the Standstill Period, neither it nor any of its
Affiliates or Associates will, and it will cause each of its Affiliates and Associates not to, directly or indirectly, in any manner, acting alone or in concert with others: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(i) submit any stockholder proposal (pursuant to Rule 14a-8 promulgated by the Securities and Exchange Commission (the &#147;<U>SEC</U>&#148;) under the Exchange Act or otherwise) or any notice of
nomination or other business for consideration, or nominate any candidate for election to the Board (including by way of Rule 14a-11 of Regulation 14A), other than as expressly permitted by this Agreement; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) engage in, directly or indirectly, any &#147;solicitation&#148; (as defined in Rule 14a-1 of Regulation 14A) of proxies (or written
consents) or otherwise become a &#147;participant in a solicitation&#148; (as such term is defined in Instruction 3 of Schedule 14A of Regulation 14A under the Exchange Act) in opposition to the recommendation or proposal of the Board, or recommend
or request or induce or attempt to induce any other person to take any such actions, or seek to advise, encourage or influence any other person with respect to the voting of the Common Stock or grant a proxy with respect to the voting of the Common
Stock or other voting securities to any person other than to the Board or persons appointed as proxies by the Board; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)
seek to call, or to request the call of, a special meeting of the Company&#146;s stockholders, or make a request for a list of the Company&#146;s stockholders or for any books and records of the Company; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv) vote for any nominee or nominees for election to the Board, other than those nominated or supported by the Board; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v) except as specifically provided in <U>Section&nbsp;1</U> and <U>Section&nbsp;2</U> of this Agreement, seek to place a representative
or other Affiliate, Associate or nominee on the Board or seek the removal of any member of the Board or a change in the size or composition of the Board; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(vi) disclose publicly, or privately in a manner that could reasonably be expected to become public, any intention, plan or arrangement inconsistent with the foregoing; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vii) take any action challenging the validity or enforceability of any provisions of this <U>Section&nbsp;3(a)</U>; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(viii) publicly request that the Company amend or waive any provision of this <U>Section&nbsp;3(a)</U>; or </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ix) enter into any agreement, arrangement or understanding concerning any of the foregoing
(other than this Agreement) or encourage or solicit any person to undertake any of the foregoing activities; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>provided</U>,
<U>however</U>, that nothing in this <U>Section&nbsp;3(a)</U> or elsewhere in this Agreement shall prohibit (A)&nbsp;an Investor Director, acting in his or her fiduciary capacity as a director of the Company, from (1)&nbsp;taking any action or
making any statement at any meeting of the Board or of any committee thereof, or (2)&nbsp;making any statement to the Chief Executive Officer, the Chief Financial Officer or any other director of the Company; (B)&nbsp;an Investor Director, acting in
his or her fiduciary capacity as a director of the Company, from making any statement or disclosure determined (on advice of outside legal counsel) to be required under the federal securities laws or other applicable laws; (C)&nbsp;any Investor from
privately making any statement or expressing or disclosing such Investor&#146;s views in private to the Chief Executive Officer, the Chief Financial Officer or another other officer or director of the Company; or (D)&nbsp;any Investor, Affiliate or
Associate from voting in such manner as it deems appropriate on any matter unrelated to the election of directors of the Company and the other matters referenced in <U>Section&nbsp;2(a)</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) As used in this Agreement: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(i) the term &#147;Affiliate&#148; means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified with
respect to the specific action at issue hereunder; the term &#147;Associate&#148; means any corporation or organization controlled by the person specified, any trust or other estate in which such person has a substantial beneficial interest or as to
which such person serves as a trustee or in a similar fiduciary capacity, and any relative or spouse of such person, or any relative of such spouse, who has the same home as such person, in each case, with respect to the specific action at issue
hereunder; the term &#147;control&#148; shall have the meaning set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act; the terms &#147;beneficial owner&#148; and &#147;beneficial ownership&#148; shall have the same meanings as set
forth in Rule 13d-3 promulgated by the SEC under the Exchange Act; and the terms &#147;person&#148; or &#147;persons&#148; shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization or other entity of any kind or nature; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) the term
&#147;Standstill Period&#148; shall mean the period commencing upon the date of this Agreement, and ending on the earlier of (A)&nbsp;ten (10)&nbsp;business days prior to the deadline for submission of stockholder nominations for the Company&#146;s
2014 annual meeting of stockholders pursuant to the Company&#146;s Restated Bylaws, as in effect from time to time (any amendment to which during the Standstill Period the Company shall give the Investors contemporaneous written notice) and
(B)&nbsp;such date, if any, as the Company has breached in any material respect any of its representations, warranties, commitments or obligations set forth in this Agreement and such breach has not been cured within fifteen (15)&nbsp;days following
written notice of such breach. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;4. <U>Settlement of Delaware Litigation</U>. Simultaneously with the execution of
this Agreement, the Company and Plaintiff Iroquois shall execute the Stipulation of Settlement </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">4 </FONT></P>


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set forth as <U>Exhibit B</U> hereto (the &#147;<U>Stipulation of Settlement</U>&#148;) and cooperate in the prompt submission of the Stipulation of Settlement for approval by the Court of
Chancery of the State of Delaware. In the event that the Stipulation of Settlement does not receive approval, the Parties agree to work collaboratively to obtain approval of the settlement of the Delaware Litigation. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;5. <U>Resignation Letter</U>. As a condition to commencement of a term on the Board (or nomination therefor), each Investor
Director shall provide to the Company an irrevocable letter of resignation which shall become effective fifteen (15)&nbsp;days after written notice of a material breach by any Investor of this Agreement is provided to the breaching Investor by the
Company (unless such breach is cured within such fifteen (15)&nbsp;day period); <U>provided</U>, that if such alleged breaching Investor disputes such breach, the resignation of such Investor Director shall not become effective until (i)&nbsp;the
Investor agrees not to dispute such breach in writing or (ii)&nbsp;a court of competent jurisdiction in a final judgment on the merits (whether or not subject to appeal) has confirmed or determined the existence of such breach. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;6. <U>Release</U>. The Investors, on behalf of themselves and their respective Affiliates, partners, members and
shareholders, hereby release Helen C. Adams, Raymond C. Smith and George W. VanDeWeghe, Jr., directors of the Company as of the date hereof, from any claims, demands, rights, liabilities, damages, actions, losses, obligations, judgments, suits,
fees, expenses, costs, any other relief of any nature whatsoever, matters, issues and causes of action of any and every kind, nature or description whatsoever, whether known or unknown, under state, federal, local, common, foreign or statutory law
or any other law, rule or regulation, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, concealed or hidden, or matured or unmatured that, in each case, were or could have been asserted against them in connection with
(i)&nbsp;the Delaware Litigation, (ii)&nbsp;the Nomination Letter or (iii)&nbsp;the Schedule 13D regarding the Company filed by Iroquois with the SEC on January&nbsp;17, 2013, as amended. For the avoidance of doubt, nothing in this Section&nbsp;6
shall have the effect of releasing the claims Iroquois asserted derivatively on behalf of LRAD in the Delaware Litigation. In the event that the Court in the Derivative Litigation finds that the release by Iroquois or the other Investors contained
in this <U>Section&nbsp;6</U> would, if effective, preclude Iroquois&#146; ability to serve as a derivative plaintiff, the release given by Iroquois and/or the other Investors shall be deemed void to the extent the Court so finds, without affecting
the validity of the remainder of this Agreement and any part of the release not affected by the Court&#146;s determination. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;7. <U>Representations and Warranties of the Company</U>. The Company represents and warrants to the Investors that
(a)&nbsp;the Company has the corporate power and authority to execute the Agreement and to bind it thereto, (b)&nbsp;this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding
obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws generally affecting the rights of creditors and subject to general equity principles and (c)&nbsp;the execution, delivery and performance of this Agreement by the Company does not and will not violate or conflict with (i)&nbsp;any law,
rule, regulation, order, judgment or decree applicable to it, or (ii)&nbsp;result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result
in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5 </FONT></P>


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of, any organizational document, or any material agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;8. <U>Representations and Warranties of the Investors</U>. Each Investor, on behalf of itself, represents and warrants to
the Company that (a)&nbsp;as of the date hereof, such Investor beneficially owns only the number of shares of Common Stock as described opposite its name on <U>Exhibit A</U> and <U>Exhibit A</U> includes all Affiliates of any Investors that own any
securities of the Company beneficially or of record, (b)&nbsp;this Agreement has been duly and validly authorized, executed and delivered by such Investor, and constitutes a valid and binding obligation and agreement of such Investor, enforceable
against such Investor in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and
subject to general equity principles, (c)&nbsp;such Investor has the authority to execute the Agreement, and to bind such Investor to the terms hereof and (d)&nbsp;the execution, delivery and performance of this Agreement by such Investor does not
and will not violate or conflict with (i)&nbsp;any law, rule, regulation, order, judgment or decree applicable to it, or (ii)&nbsp;result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both
could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment,
understanding or arrangement to which such member is a party or by which it is bound. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;9. <U>Mutual
Non-Disparagement</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Each Investor agrees that, during the Standstill Period, neither it nor any of its Affiliates or
Associates will, and it will cause each of its Affiliates and Associates not to, directly or indirectly, in any capacity or manner, make, express, transmit speak, write, verbalize or otherwise communicate in any way (or cause, further, assist,
solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal, in writing, electronically transferred or otherwise, that
might reasonably be construed to be derogatory toward, the Company or any of its directors, officers, Affiliates, subsidiaries, employees, agents or representatives (collectively, the &#147;<U>Company Representatives</U>&#148;), or that reveals,
discloses, incorporates, is based upon, discusses, includes or otherwise involves any confidential or proprietary information of the Company or its subsidiaries or Affiliates, or derogatorily to malign, harm, disparage, defame or damage the
reputation or good name of the Company, its business or any of the Company Representatives. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) The Company hereby agrees
that, during the Standstill Period, neither it nor any of its Affiliates will, and it will cause each of its Affiliates not to, directly or indirectly, in any capacity or manner, make, express, transmit, speak, write, verbalize or otherwise
communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal, in writing,
electronically transferred or otherwise, that might reasonably be construed to be derogatory toward, any Investor or any of its agents or representatives (collectively, the &#147;<U>Investor Representatives</U>&#148;), or that reveals, discloses,
incorporates, is based upon, discusses, includes or otherwise involves any confidential or </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">6 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
proprietary information of any Investor or its subsidiaries or Affiliates, or derogatively to malign, harm, disparage, defame or damage the reputation or good name of any Investor or Investor
Representative. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Notwithstanding the foregoing, nothing in this <U>Section&nbsp;9</U> or elsewhere in this Agreement shall
prohibit any Party from making any statement or disclosure required under the federal securities laws or other applicable laws; <U>provided</U>, that such Party must provide written notice to the other Parties at least two (2)&nbsp;business days
prior to making any such statement or disclosure required under the federal securities laws or other applicable laws that would otherwise be prohibited by the provisions of this <U>Section&nbsp;9</U>, and reasonably consider any comments of such
other Parties. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;10. <U>Public Announcements</U>. Promptly following the execution of this Agreement, the Company
and the Investors shall jointly issue a mutually agreeable press release (the &#147;<U>Mutual Press Release</U>&#148;) announcing the terms of this Agreement, substantially in the form attached hereto as <U>Exhibit C</U>. Prior to the issuance of
the Mutual Press Release, neither the Company nor the Investors shall issue any press release or public announcement regarding this Agreement or take any action that would require public disclosure thereof without the prior written consent of the
other Party. No Party or any of its Affiliates shall make any public statement (including, without limitation, in any filing required under Regulation 13D under the Exchange Act) concerning the subject matter of this Agreement inconsistent with the
Mutual Press Release. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;11. <U>Specific Performance</U>. Each of the Investors, on the one hand, and the Company,
on the other hand, acknowledges and agrees that irreparable injury to the other Party hereto may occur in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached and that
such injury would not be adequately compensable in monetary damages. It is accordingly agreed that the Investors or any Investor, on the one hand, and the Company, on the other hand (the &#147;<U>Moving Party</U>&#148;), shall each be entitled to
specific enforcement of, and injunctive or other equitable relief to prevent any violation of, the terms hereof, and the other party hereto will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the
grounds that any other remedy or relief is available. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;12. <U>Notice</U>. Any notices, consents, determinations,
waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (a)&nbsp;upon receipt, when delivered personally; (b)&nbsp;upon receipt, when sent by
electronic transmission (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (c)&nbsp;one (1)&nbsp;business day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">If to the Company, addressed to: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">LRAD Corporation </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">16990 Goldentop Rd., Ste. A </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">7 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">San Diego, California 92127 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attention: Katherine H. McDermott </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Tel: (858)&nbsp;676-1112 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fax: (858)&nbsp;676-1080 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Email: KathyMcDermott@lradx.com </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">with a copy to (for information purposes only): </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Durham Jones&nbsp;&amp; Pinegar,
P.C. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">192 E. 200 N., Third Floor </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">St. George, UT 84770 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attention: Joshua E. Little, Esq. </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Tel: (435)&nbsp;674-0400 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Fax: (435)&nbsp;628-1610 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Email: jlittle@djplaw.com </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">and </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Latham&nbsp;&amp; Watkins LLP </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">12636 High Bluff Drive, Suite 400 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">San Diego, California 92130 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attention: Craig M. Garner, Esq. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Tel: (858)&nbsp;523-5400 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fax: (858)&nbsp;523-5450 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Email: craig.garner@lw.com </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">If to the Investors, addressed to: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Iroquois Capital Management LLC </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">641 Lexington Avenue, 26th Floor </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">New York, New York 10022 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attention: Joshua Silverman </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Tel: (212)&nbsp;974-3070 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Fax: (212)&nbsp;207-3452 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Email: jsilverman@icfund.com </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">with a copy to (for information purposes only): </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Akin Gump Strauss Hauer&nbsp;&amp; Feld LLP </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">One Bryant Park </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">New York, NY 10036 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Attention: Patrick J. Dooley, Esq. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Tel: (212)&nbsp;872-1080 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fax: (212)&nbsp;872-1002 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Email: pdooley@akingump.com </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">8 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;13. <U>Governing Law</U>. This Agreement shall be governed by, and construed in
accordance with, the Law of the State of Delaware, without regard to conflict of law principles thereof.</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;14.
<U>Exclusive Jurisdiction</U>. Each Party to this Agreement (i)&nbsp;irrevocably and unconditionally submits to the personal jurisdiction of the state courts of the State of Delaware and the federal courts of the United States of America located in
the State of Delaware, (ii)&nbsp;agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii)&nbsp;agrees that any actions or proceedings arising in connection with this
Agreement or the transactions contemplated by this Agreement shall be brought, tried and determined only in the Court of Chancery of the State of Delaware (or, only if said Court of Chancery declines to accept jurisdiction over a particular matter,
any state or federal court within the State of Delaware), (iv)&nbsp;waives any claim of improper venue or any claim that those courts are an inconvenient forum and (v)&nbsp;agrees that it will not bring any action relating to this Agreement or the
transactions contemplated hereunder in any court other than as specified in clause (iii)&nbsp;of this <U>Section&nbsp;14</U>. The Parties to this Agreement agree that mailing of process or other papers in connection with any such action or
proceeding in the manner provided in <U>Section&nbsp;12</U> or in such other manner as may be permitted by applicable Law, shall be valid and sufficient service thereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;15. <U>Waiver of Jury Trial</U>. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND,
THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A)&nbsp;NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A
LEGAL ACTION, (B)&nbsp;SUCH PARTY HAS CONSIDERED AND UNDERSTANDS THE IMPLICATIONS OF THIS WAIVER, (C)&nbsp;SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D)&nbsp;SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS <U>SECTION 15</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;16. <U>Entire Agreement</U>. This Agreement and the
Stipulation of Settlement constitute the full and entire understanding and agreement among the Parties with regard to the subject matter hereof, and supersedes all prior agreements with respect to the subject matter hereof. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;17. <U>Receipt of Adequate Information; No Reliance; Representation by Counsel</U>.&nbsp;Each Party acknowledges that it has
received adequate information to enter into this Agreement, that is has not relied on any promise, representation or warranty, express or implied not contained in this Agreement and that it has been represented by counsel in connection with this
Agreement. Accordingly, any rule of law or any legal decision that would provide any party with a defense to the enforcement of the terms of this Agreement against such party shall have </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
no application and is expressly waived.&nbsp;The provisions of the Agreement shall be interpreted in a reasonable manner to effect the intent of the Parties. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;18. <U>Amendment</U>. This Agreement may be modified, amended or otherwise changed only in a writing signed by all of the
Parties. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;19. <U>Successors and Assigns</U>. This Agreement shall bind the successors and permitted assigns of
the Parties, and inure to the benefit of any successor or permitted assign of any of the parties; <U>provided</U>, <U>however</U>, that no party may assign this Agreement without the prior written consent of the other Parties. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;20. <U>Counterparts</U>. This Agreement may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each Party shall have received a counterpart hereof signed by all of the other Parties. Until and unless each
party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other
communication). The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in .PDF format or by facsimile shall be sufficient to bind the parties to the terms and conditions of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;21. <U>Attorneys&#146; Fees</U>. In the event any Party shall fail to perform any of its material obligations under this
Agreement and another Party hereto shall bring suit, and establish, in a court of proper jurisdiction under Section&nbsp;14 (after all appeals) that the actions of such alleged breaching Party giving rise to such breach were undertaken with the
actual intent and actual purpose of materially breaching this Agreement, then all reasonable third party out-of pocket fees and expenses, including, without limitation, reasonable attorneys&#146; fees and expenses, that may be incurred by the
prevailing Party in enforcing this Agreement as relates to such material breach shall be paid by the materially breaching Party; provided that prior to initiating such suit, the claiming Party shall give the other Parties written notice of the
claimed breach and ten (10)&nbsp;days from receipt of such notice to cure any claimed breach. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">[<I>Signature page follows</I>]
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">10 </FONT></P>



<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered this Agreement as of
the date first above written. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">


<TR>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="87%"></TD></TR>


<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>LRAD CORPORATION</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/<SMALL>S</SMALL>/ T<SMALL>HOMAS</SMALL> R. B<SMALL>ROWN</SMALL></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Thomas R. Brown</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">President &amp; CEO</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>INVESTORS:</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">IROQUOIS CAPITAL MANAGEMENT L.L.C.</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/<SMALL>S</SMALL>/ J<SMALL>OSHUA</SMALL> S<SMALL>ILVERMAN</SMALL></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Joshua Silverman</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Authorized Signatory</FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">IROQUOIS MASTER FUND LTD</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/<SMALL>S</SMALL>/ J<SMALL>OSHUA</SMALL> S<SMALL>ILVERMAN</SMALL></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Joshua Silverman</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Authorized Signatory</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/<SMALL>S</SMALL>/ J<SMALL>OSHUA</SMALL> S<SMALL>ILVERMAN</SMALL></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Joshua Silverman</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/<SMALL>S</SMALL>/ R<SMALL>ICHARD</SMALL> A<SMALL>BBE</SMALL></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Richard Abbe</FONT></TD></TR>
</TABLE></DIV>

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<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>EXHIBIT A </U></B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="83%"></TD>
<TD VALIGN="bottom" WIDTH="10%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:28pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Investor</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Shares&nbsp;of&nbsp;Common&nbsp;
Stock</B></FONT><br><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Beneficially Owned<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">*</SUP></B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Iroquois Capital Management L.L.C.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,006,935</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Joshua Silverman</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">21,167</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Richard Abbe</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">285,034</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B></B><B></B><B>Total: 2,313,136</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
</TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">*</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">See Schedule 13D/A filed with the SEC by Investors on March&nbsp;4, 2013 for more detailed information. </FONT></TD></TR></TABLE>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>EXHIBIT B </U></B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Stipulation of Settlement </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="41%"></TD>
<TD VALIGN="bottom"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="57%"></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">IROQUOIS MASTER FUND, LTD.,</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="text-indent:8.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Plaintiff,</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="text-indent:4.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">v.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="text-indent:2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">C.A. No. 7704-VCP</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">RAYMOND C. SMITH, LAURA M. CLAGUE,</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">HELEN C. ADAMS, THOMAS R. BROWN</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">and KATHERINE McDERMOTT,</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="text-indent:8.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Defendants,</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="text-indent:4.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">and</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">LRAD CORPORATION,</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="text-indent:8.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Nominal Defendant.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
</TABLE> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>STIPULATION OF SETTLEMENT </U></B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This Stipulation of Compromise and Settlement (&#147;Stipulation of Settlement&#148; or &#147;Stipulation&#148;) is dated as of
May&nbsp;22, 2013, and is entered into, by and among the parties to the above-captioned stockholder derivative action (the &#147;Action&#148;): a) Iroquois Master Fund, Ltd. (&#147;Iroquois&#148;) suing on behalf of Nominal Defendant LRAD
Corporation (&#147;LRAD&#148; or the &#147;Company&#148;); b) LRAD; and c) the individual defendants, Raymond C. Smith, Laura M. Clague, Helen C. Adams, Thomas R. Brown, and Katherine McDermott, (collectively the &#147;Individual Defendants&#148;),
by and through their respective counsel. All capitalized terms in this Stipulation have the meanings as defined in paragraphs 1.1-1.26 herein. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>FACTUAL BACKGROUND LEADING TO THE SETTLEMENT </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Action is brought on behalf of Nominal Defendant LRAD, a Delaware corporation headquartered in San Diego, California. LRAD develops
and delivers innovative directed acoustic products that beam, focus, and control sound over short and long distances, primarily for use by government, military, law enforcement and security entities. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On May&nbsp;10, 2012, the Compensation Committee of the Board granted 975,000 nonqualified stock options to the Company&#146;s Officers
and Directors with strike prices set at the stock&#146;s closing price on the NASDAQ stock market on May&nbsp;10, 2012 of $1.33 per share (the &#147;Stock Option Grants&#148;), pursuant to the Equity Incentive Plan. Specifically, the Compensation
Committee awarded 750,000 options to LRAD&#146;s CEO, Mr.&nbsp;Thomas Brown; 100,000 options to LRAD&#146;s CFO, Ms.&nbsp;Katherine McDermott; 50,000 options to each of Compensation Committee members and Directors, Laura M. Clague and Admiral
Raymond Smith; and 25,000 options to Compensation Committee member and Director Helen C. Adams. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On July&nbsp;23, 2012,
Iroquois filed a complaint against the Individual Defendants, on behalf of Nominal Defendant LRAD in the Delaware Court of Chancery: <I>Iroquois Master Fund, Ltd. v. Smith, et. al.</I>, Civil Action No.&nbsp;7704-VCP. After LRAD and the Individual
Defendants moved to dismiss the Complaint on August&nbsp;28, 2012, Iroquois filed an amended complaint on November&nbsp;19, 2012 (the &#147;Amended Complaint&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In the Amended Complaint, Iroquois alleged that the stock options granted on May&nbsp;10, 2012 were undervalued and timed to coincide with negative earnings announcements, and to precede positive
announcements concerning future sales contracts. The Amended Complaint alleged claims for breach of fiduciary duty, unjust enrichment, and waste. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On December&nbsp;17, 2012, LRAD and the Individual Defendants moved to dismiss the Amended
Complaint. A hearing was held on Defendants&#146; motion to dismiss before Vice Chancellor Donald F. Parsons on March&nbsp;4, 2013. That motion is under submission. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">On January&nbsp;17, 2013, Iroquois, on behalf of the Investors, delivered a letter to the Company expressing an intention to nominate director candidates (the &#147;Nomination Letter&#148;) for election
to the Board at the Company&#146;s Annual Meeting. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In or about February, 2013, the Parties entered into settlement
negotiations. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>INVESTIGATION AND RESEARCH CONDUCTED BY PLAINTIFF&#146;S COUNSEL </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Plaintiff&#146;s Counsel represent that they have conducted an investigation during the development and prosecution of the Action
sufficient to comply with their obligations under Court of Chancery Rule 11. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>DENIAL OF WRONGDOING AND LIABILITY </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Individual Defendants have denied and continue to deny any wrongdoing alleged or that could have been alleged, by Plaintiff with
respect to each and all claims, events, and transactions complained of in the Action. The Individual Defendants assert that at all relevant times, they acted in good faith and in a manner they reasonably believed to be in the best interests of LRAD
and its stockholders. The Individual Defendants deny the allegations that LRAD or the Plaintiff or LRAD&#146;s other stockholders have suffered damages, were harmed in any way by the conduct alleged in the Action or that they are entitled to any
equitable or other relief. LRAD asserts that Iroquois was required to make a demand upon its Board, prior to commencing the Action to request the desired action and failed to do so. Iroquois asserts that demand was excused as futile. Nonetheless,
LRAD and the Individual Defendants have agreed to settle the Action on the terms in this Stipulation. Without conceding the merit of any of </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
Iroquois&#146;s allegations, or lack of merit of any of the Individual Defendants&#146; defenses, and in order to avoid the potentially protracted time, expense, and uncertainty associated with
continued litigation, LRAD and the Individual Defendants have concluded that it is desirable that the Action be fully and finally settled in the manner and upon the terms and conditions set forth in this Stipulation. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>CLAIMS OF THE PLAINTIFF AND BENEFITS OF SETTLEMENT </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Iroquois and Iroquois&#146;s Counsel believe that the claims asserted in the Action have merit and that their investigation supports the claims asserted. Without conceding the merit of any of the
Individual Defendants&#146; defenses or the lack of merit of any of their allegations, and in order to avoid the potentially protracted time, expense, and uncertainty associated with continued litigation, including potential trial and appeals,
Iroquois has concluded that it is desirable that the Action be fully and finally settled in the manner and upon the terms and conditions set forth in this Stipulation. Based on these considerations, among others, Iroquois believes that the
Settlement has conferred or will confer substantial benefits upon and is in the best interests of LRAD and Current LRAD Stockholders. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>THE
INVESTORS&#146; SETTLEMENT AGREEMENT </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">LRAD is simultaneously entering into an agreement with certain Investors, including
Iroquois (the &#147;Investors Settlement Agreement&#148;), attached hereto as Exhibit A. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>NOW, THEREFORE, IT IS HEREBY
STIPULATED AND AGREED </B>by and among Iroquois, on behalf of itself and derivatively on behalf of LRAD, LRAD, and the Individual Defendants, by and through their respective counsel, subject to the approval of the Court pursuant to Court of Chancery
Rule 23.1(c), that all Released Claims shall be finally and </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">4 </FONT></P>


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fully compromised, settled, discontinued, and released, and the Action shall be dismissed with prejudice, as to all Released Parties, upon the following terms and conditions: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1. Definitions </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">As used herein, the following terms have the meanings specified below: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.1.
&#147;Action&#148; means the following litigation pending in this Court, entitled: <I>Iroquois Master Fund, Ltd. v. Smith, et. al.</I>, Civil Action No.&nbsp;7704-VCP. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.2. &#147;Annual Meeting&#148; means the Company&#146;s 2013 annual meeting of stockholders, including any adjournment thereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.3. &#147;Affiliate&#148; and &#147;Associate&#148; shall have the respective meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.4. &#147;Amended Complaint&#148; means the complaint filed in this Action on November&nbsp;19, 2012. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.5. &#147;Beneficial Owner&#148; and &#147;Beneficial Ownership&#148; shall have the same meanings as set forth in Rule 13d-3
promulgated by the SEC under the Exchange Act. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.6. &#147;Board&#148; means the current directors serving on the LRAD Board
of Directors. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.7. &#147;Company&#148; or &#147;LRAD&#148; means LRAD Corporation and its predecessors, successors,
Affiliates, divisions and assigns. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.8. &#147;Court&#148; means the Delaware Court of Chancery, New Castle County.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.9. &#147;Current LRAD Stockholder&#148; or &#147;Current LRAD Stockholders&#148; means any record or Beneficial Owner of
LRAD common stock as of May&nbsp;21, 2013, and their successors in interest, who continue to hold their LRAD shares as of the date of the Judgment (as defined in &para;1.15). </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.10. &#147;Defense Counsel&#148; means counsel of record who represent LRAD and the
Individual Defendants in the Action: DLA Piper LLP (US). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.11. &#147;Effective Date&#148; means the first date by which all
of the events and conditions specified in &para;6.1 have been met and have occurred. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.12. &#147;Final&#148; means that with
respect to any court order, including but not limited to the Judgment (the form of which is attached hereto as Exhibit B), such order represents a final and binding determination of all issues within its scope and is not subject to further review on
appeal or otherwise. An order becomes &#147;Final&#148; when: (a)&nbsp;the date as of which the time to appeal the Court&#146;s order has expired without any appeal having been sought or taken; or (b)&nbsp;if an appeal is filed, sought or taken, the
date as of which the Delaware Supreme Court has affirmed the Court&#146;s original order without any material change thereto. For purposes of this definition, an &#147;appeal&#148; includes, among others, appeals as of right, discretionary appeals,
interlocutory appeals, mandamus, or prohibition, and any other proceedings of like kind. Notwithstanding the foregoing, any appeal or other proceeding pertaining to any order issued with respect to Plaintiff&#146;s Counsel&#146;s application for
attorneys&#146; fees and/or expenses, shall not in any way delay or preclude the Judgment from becoming Final as defined herein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.13. &#147;Individual Defendants&#148; means Raymond C. Smith, Laura M. Clague, Helen C. Adams, Thomas R. Brown, and Katherine McDermott. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.14. &#147;Investors Settlement Agreement&#148; means Exhibit A to this Stipulation. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.15. &#147;Judgment&#148; means the Order and Judgment of Dismissal to be rendered by the Court, substantially in the form attached
hereto as Exhibit B. </FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.16. &#147;Notice of Settlement of the Action&#148; or &#147;Notice&#148; means the notice
to stockholders of the Stipulation of Settlement and of the Settlement Hearing Date, approved by the Court. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.17.
&#147;Person&#148; means an individual, corporation, limited liability company, professional corporation, joint venture, limited liability partnership, partnership, limited partnership, association, joint stock company, estate, legal representative,
trust, unincorporated association, government or any political subdivision or agency thereof, and any business or legal entity and their spouses, heirs, predecessors, successors, representatives, or assignees. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.18. &#147;Plaintiff&#148; means Iroquois Master Fund, Ltd. and its predecessors, successors, controlling shareholders, partners, joint
ventures, subsidiaries, Affiliates, Beneficial Owners, divisions and assigns. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.19. &#147;Plaintiff&#146;s Counsel&#148;
means counsel who represent the Plaintiff in the Action: the law firms of Rosenthal, Monhait&nbsp;&amp; Goddess, P.A. and Abbey Spanier, LLP. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.20. &#147;Related Parties&#148; means each of the Individual Defendants&#146; heirs, estates, executors, administrators, personal or legal representatives, beneficiaries, spouses, insurers, attorneys,
advisors , assigns, and any entity in which an Individual Defendant and/or member(s) of his or her family has an interest, any members of their immediate families, or any trust of which an Individual Defendant is the settlor or which is for the
benefit of any Individual Defendant and/or member(s) of his or her family. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.21. &#147;Released Claims&#148; shall
collectively mean any and all claims (including &#147;Unknown Claims&#148; as defined in &para;1.26 hereof), debts, demands, rights, liabilities, damages, actions, losses, obligations, judgments, suits, fees, expenses, costs, any other relief of any
nature whatsoever, matters, issues and causes of action of any and every kind, nature or description </FONT></P>
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whatsoever, whether known or unknown, under state, federal, local, common, foreign or statutory law or any other law, rule or regulation, contingent or absolute, suspected or unsuspected,
disclosed or undisclosed, concealed or hidden, or matured or unmatured, direct or derivative (collectively, &#147;Claims&#148;) that were or could have been asserted in the Action, derivatively or otherwise, in the right of, or on behalf of, LRAD)
or by Plaintiff as an investor against any of the Released Persons, which are based upon or relate in any manner to the allegations, matters, acts, facts, circumstances, transaction, events, occurrences, disclosures, statements, representations,
misrepresentations, omissions, acts or failures to act, alleged in, referred to or otherwise related, directly or indirectly, to (i)&nbsp;the Action or (ii)&nbsp;the subject matter or allegations of the Action, including, without limitation, claims
for breach of fiduciary duty, including without limitation the duties of care, loyalty and/or oversight, self-dealing, misrepresentation (whether intentional, negligent or innocent), omission (whether intentional, negligent or innocent), concealment
(whether intentional, negligent or innocent), mismanagement, gross mismanagement, abuse of control, waste, money damages, unjust enrichment, breach of contract, or violations of any federal, state, local or foreign law, or any other rule, law, or
regulation, or any other source of legal or equitable obligation of any kind or description in whatever forum or allegations that could have been made in the Action. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.22. &#147;Released Persons&#148; means each and all of the Individual Defendants and their respective Related Parties. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.23. &#147;Settlement&#148; means the proposed settlement and compromise of the Action as provided for herein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.24. &#147;Settlement Hearing Date&#148; means the hearing date set by the Court to consider approval of the Stipulation of Settlement. </FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.25. &#147;Settling Parties&#148; means, collectively, LRAD, the Individual Defendants, and
the Plaintiff on behalf of itself as an investor and derivatively on behalf of LRAD. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.26. &#147;Unknown Claims&#148; means
any of the Released Claims which Plaintiff or LRAD or Current LRAD Stockholders claiming through LRAD do not know or suspect to exist in his, her, its or their favor at the time of the release of the Released Persons, including claims which, if
known by him, her, it or them, might have affected his, her, its or their settlement with and release of the Released Persons, or might have affected his, her, its or their decision not to object to this Settlement. Plaintiff or LRAD or Current LRAD
Stockholders claiming through LRAD may hereafter discover facts in addition to or different from those which he, she, it or they now knows or believes to be true with respect to the subject matter of the Released Claims, but Plaintiff, LRAD, or
Current LRAD Stockholders claiming through LRAD shall expressly, upon the Effective Date, be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever settled and released any and all Released Claims, known or unknown,
suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed upon any theory of law or equity now existing or coming into existence in the future, including, but not limited
to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. With respect to any and all Released Claims,
Plaintiff and LRAD stipulate, and agree that, except as provided herein, upon the Effective Date, Plaintiff and LRAD expressly waive, and by operation of the Final Judgment and Order shall have expressly waived the provisions, rights and benefits of
Section&nbsp;1542 of the California Civil Code, which provides that: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER </FONT></P>
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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. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Upon the Effective Date, Plaintiff for itself and on behalf of LRAD, and LRAD, shall expressly waive, any and all provisions, rights and benefits
conferred by the law of any jurisdiction or any state or territory of the United States, or principle of common law, which are similar, comparable or equivalent to California Civil Code &#167; 1542. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2. The Settlement </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">2.1. <U>Restatement of Stock Option Grant of Thomas R. Brown (&#147;Brown&#148;). </U>Defendant Brown agrees to reprice the strike price of each and every of the 750,000 non-qualified stock options
granted to him on May&nbsp;10, 2012 from $1.33 to $3.00. The repricing shall occur within three business days of the Effective Date, assuming that an Effective Date occurs. Defendant Brown agrees not to exercise any of the options that are the
subject of this paragraph of the Stipulation pending the Effective Date. If the Effective Date does not occur because the Court does not issue the Judgment approving the settlement and dismissing the case, or the Judgment does not become Final,
paragraph 6.2 shall govern. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3. Order Approving Notice to Stockholders and Setting Settlement Hearing Date </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.1. Within five (5)&nbsp;days of the full execution of this Stipulation and the Investors Settlement Agreement, the Settling Parties
shall jointly submit this Stipulation together with its exhibits to the Court and shall apply for entry of the order, substantially in the form of Exhibit C attached hereto, providing for the scheduling of the Settlement Hearing Date, and approving
the mailing of a Notice of Settlement of the Action, substantially in the form of Exhibit D attached hereto or such other form of notice as approved by the Court (&#147;Scheduling Order&#148;). </FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.2. No later than sixty (60)&nbsp;days prior to the Settlement Hearing Date, LRAD shall
provide Current LRAD Stockholders with notice of the Settlement by disseminating by First Class Mail (or by more expedient means) the Notice to all Current LRAD stockholders at their respective addresses currently set forth in LRAD&#146;s stock
records, if known. If no address is known for beneficial owners, LRAD shall use reasonable efforts to give notice to all beneficial owners of LRAD common stock by providing additional copies of the Notice to any record owner requesting the Notice
for the purpose of distribution to such beneficial owners. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.3. LRAD shall pay for the costs associated with disseminating
the Notice as provided in &para;3.2 or in the form approved by the Court. At least ten (10)&nbsp;court days prior to the Settlement Hearing Date, LRAD shall file with the Court an appropriate declaration with respect to the posting, filing and
publication of the Notice. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4. Releases </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">4.1. Upon the Effective Date, (i)&nbsp;Plaintiff and Plaintiff&#146;s Counsel, on their own behalf and derivatively on behalf of LRAD (as nominal defendant); (ii)&nbsp;LRAD; and (iii)&nbsp;Current LRAD
Stockholders, to the extent claiming by, through, in the right of, derivatively, or on behalf of LRAD; shall be deemed to have, and by operation of the Judgment shall have, fully, finally and forever released, relinquished, extinguished and
discharged all Released Claims, including Unknown Claims, against each and all of the Released Persons and shall be permanently barred and enjoined from instituting, commencing or prosecuting or asserting any Released Claim against any of the
Released Persons. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.2. Upon the Effective Date, each of the Released Persons shall be deemed to have, and by operation of the
Judgment shall have, fully, finally, and forever released, relinquished, extinguished and discharged (i)&nbsp;Plaintiff and Plaintiff&#146;s Counsel; and (ii)&nbsp;LRAD, from all claims </FONT></P>
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(including Unknown Claims as defined in &para;1.26) arising out of, relating to or in connection with the institution, prosecution, assertion, settlement or resolution of the Action or the
Released Claims. Nothing herein shall in any way impair or restrict the rights of LRAD or any Released Person to enforce the terms of this Stipulation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">4.3. Notwithstanding the above, nothing herein is intended to or does release the following claims (the &#147;Reserved Claims&#148;), which are reserved without agreement or acknowledgment as to the
merits or lack of those claims: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Nothing herein is intended to affect any rights with respect to past or future
indemnification or advancement or payment of past or future legal fees and defense costs arising under and pursuant to any Released Person&#146;s respective indemnification agreements with LRAD, LRAD&#146;s certificate of incorporation or by-laws,
applicable law, equity or other contract, or any entitlement to insurance coverage or insurance proceeds; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) The Released
Persons and LRAD shall retain and reserve all rights to seek contribution or equitable indemnification from any Person (other than a Released Person) in connection with all actions, and any other litigation, matter, proceeding, or investigation
commenced after the date of this Stipulation; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Nothing provided for in Paragraphs 4.3(a) or 4.3(b) shall permit the
Released Persons to seek indemnification from LRAD for any settlement consideration provided for in Section&nbsp;2.1 above. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>5. Plaintiff&#146;s Counsel&#146;s Attorneys&#146; Fees And Expenses </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.1. Except as stated in this paragraph and in &para; 3.3, each party shall bear its own attorneys&#146; fees and costs. Plaintiff and
Plaintiff&#146;s counsel may, however, apply to the Court for </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">12 </FONT></P>



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an award of attorneys&#146; fees and expenses to be paid by LRAD (the &#147;Fee Award&#148;). The Individual Defendants shall have no obligations with respect to the Fee Award. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.2. LRAD shall cause the Fee Award to be sent by wire transfer to Abbey Spanier LLP (as receiving agent for all Plaintiff&#146;s
Counsel) within five (5)&nbsp;business days after the Effective Date. LRAD and the Individual Defendants shall have no liability whatsoever with respect to the allocation of the Fee Award among Plaintiff&#146;s Counsel. Any disapproval or
modification of the Fee Award by the Court shall not (i)&nbsp;affect the enforceability of this Settlement; or (ii)&nbsp;provide any of the Settling Parties with the right to terminate the Settlement as set forth in this Stipulation; or
(iii)&nbsp;prevent the Judgment from becoming Final. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>6. Effective Dates; Conditions Of Settlement, Effect Of Non-Approval,
Cancellation Or Termination </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.1. The Effective Date shall be the date when of all of the following events have occurred:
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">a) The Court has entered the Scheduling Order substantially similar in form to Exhibit C, attached hereto; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">b) The Court has approved the Settlement as described herein, following Notice to Current LRAD Stockholders as provided in &para;3.2
herein; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">c) The Court has entered the Judgment substantially in the form of Exhibit B, attached hereto; and </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">d) The Judgment has become Final, as defined in &para;1.12. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">6.2. If all of the conditions specified in &para;6.1 and its subparagraphs are not met because the Court does not approve the Settlement, or the Judgment approving the Settlement is reversed or fails to
become Final, then the settlement shall become null and void with the exception of </FONT></P>
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&para;3.3. The Parties shall then meet and confer to evaluate whether to submit a modified Settlement for court approval. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>7. Representations and Warranties </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.1. Each counsel or other Person
executing the Stipulation or any of its Exhibits on behalf of any party hereto hereby warrants that such Person has the full authority to do so. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>8. Miscellaneous Provisions </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.1. <U>Intent of the Parties</U>: The
Settling Parties (a)&nbsp;acknowledge that it is their intent to consummate the agreements embodied in this Stipulation; and (b)&nbsp;agree to cooperate to the extent necessary to effectuate and implement all terms and conditions of the Stipulation
and to exercise their good faith best efforts to accomplish the foregoing terms and conditions of the Stipulation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.2.
<U>Stay of Proceedings</U>: Pending the Effective Date, (i)&nbsp;Plaintiff and Plaintiff&#146;s counsel agrees to stay all proceedings in this Action and not to initiate any proceedings concerning the Released Claims other than those incident to the
Stipulation itself; and, (ii)&nbsp;if requested, to join on behalf of LRAD with the Individual Defendants to seek to prevent or stay any other action or claims brought seeking to assert any Released Claim. If any action that would be barred by the
releases contemplated by this Stipulation is commenced against any of the Released Persons prior to the Effective Date, and such action is not enjoined or dismissed prior to the Effective Date, then the Stipulation and the Stipulation shall be
canceled and terminated. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.3. <U>No Admission of Liability</U>: Neither the Stipulation, including any exhibits attached
hereto nor any act performed or document executed pursuant to or in furtherance of the Stipulation, including any exhibits attached hereto: (a)&nbsp;is or may be deemed to be or may be </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">14 </FONT></P>



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used as an admission of, or evidence of, the validity or invalidity of any Released Claim, or of any wrongdoing or liability or lack thereof of the Individual Defendants or Released Persons; or
(b)&nbsp;is or may be deemed to be or may be used as an admission of, or evidence of, any fault or omission or lack thereof of any of the Individual Defendants or Released Persons in any proceeding of any kind or nature, including civil, criminal or
administrative proceeding in any court, administrative agency or other tribunal. LRAD, the Individual Defendants or Released Persons may file the Stipulation and/or the Judgment in any action that may be brought against them in order to support a
defense or counterclaim based on principles of <I>res judicata</I>, collateral estoppel, full faith and credit, release, standing, good faith Stipulation, judgment bar or reduction or any other theory of claim preclusion or issue preclusion or
similar defense or counterclaim. The Individual Defendants have denied and continue to deny each and all of the claims alleged in the Action. Plaintiff or LRAD may file the Stipulation in any proceeding brought to enforce any of its terms or
provisions. The Settling Parties and their counsel, and each of them, agree, to the extent permitted by law, that all agreements made and orders entered during the course of the Action relating to the confidentiality of information shall survive
this Stipulation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.4. <U>Effect of Merger or Change of Control</U>: The Settling Parties agree that this Stipulation will
run to their respective successors-in-interest, and they further agree that any planned, proposed or actual sale, merger or change in control of LRAD shall not void this Stipulation, and that in the event of a planned, proposed or actual sale,
merger or change-in-control of LRAD they will continue to seek final approval of this Stipulation expeditiously, including, but not limited to, adhering to the schedule set forth in the Scheduling Order. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.5. <U>No Future Litigation</U>: Plaintiff agrees not to institute, join in, or cooperate in any way in any threatened, pending, or
future litigation, lawsuit, claim or action against the Released </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">15 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
Persons, or any of them, alleging, prosecuting, regarding, concerning, relating to, referring to or arising out of in any way the Released Claims. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.6. <U>Representation of No Assignment</U>: Plaintiff warrants and represents that it has not assigned or transferred or attempted to
assign or transfer to any person or entity any Released Claim or any portion thereof or interest therein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.7. <U>Arm&#146;s
Length Negotiation</U>: This Stipulation has been negotiated by the Settling Parties at arm&#146;s length and all are represented by counsel. No provision or ambiguity in this Stipulation shall be construed or interpreted against any of the Settling
Parties by virtue of his/her/its participation in the drafting of this Stipulation. The Stipulation shall in all cases be construed as a whole, according to its fair meaning and not strictly for or against any of the Settling Parties. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.8. <U>Consideration</U>: The covenants contained in this Stipulation provide good and sufficient consideration for every promise, duty,
release, obligation, agreement and right contained in this Stipulation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.9. <U>Incorporation</U>: All of the Exhibits to the
Stipulation are fully incorporated herein by reference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.10. <U>Amendment</U>: The Stipulation may be amended or modified
only by a written instrument signed by or on behalf of all Settling Parties or their respective successors-in-interest. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.11.
<U>Counterparts</U>: This Stipulation may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.12. <U>Successors and Assigns</U>: This Stipulation shall bind the successors and permitted assigns of the Settling Parties and
Released Persons, and inure to the benefit of any successor or </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">16 </FONT></P>



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permitted assign of any of the parties; provided, however, that no party may assign this Stipulation without the prior written consent of the other Settling Parties. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.13. <U>Subject Matter Jurisdiction</U>: The Court shall retain jurisdiction with respect to implementation and enforcement of the terms
of the Stipulation, and all parties hereto submit to the jurisdiction of the Court for purposes of implementing and enforcing the Stipulation embodied in the Stipulation and for any matters arising out of, concerning or relating thereto. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.14. <U>Choice of Law</U>: The Stipulation, and the Exhibits hereto shall be considered to have been negotiated, executed and delivered,
and to be wholly performed, in the State of Delaware, and the rights and obligations of the parties to the Stipulation shall be construed and enforced in accordance with, and governed by, the internal substantive laws of the State of Delaware
without giving effect to that State&#146;s choice of law principles. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, the parties hereto have caused the
Stipulation to be executed, by their duly authorized attorneys. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">ROSENTHAL, MONHAIT &amp; GODDESS, PA</FONT></TD></TR>
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<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
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<TD VALIGN="top"></TD>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Jessica Zeldin (DE Bar No. 3558)</FONT></TD></TR>
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<TD VALIGN="top" ROWSPAN="5"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">OF COUNSEL:</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">ABBEY SPANIER, LLP</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">212 E. 39th Street</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">New York, NY 10016</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(212)
889-3200</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">919 N. Market Street, Suite 1401</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">PO Box 1070</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Wilmington, DE 19899</FONT></TD></TR>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(302) 656-4433</FONT></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attorneys for Plaintiff Iroquois Master Fund Ltd.</FONT></P></TD></TR>
</TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">17 </FONT></P>



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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">DLA PIPER LLP (US)</FONT></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">John L. Reed (DE Bar No.&nbsp;003023)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">919 N. Market Street, Suite 1500</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Wilmington, DE 19801</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(302)&nbsp;468-5635</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Shirli Fabbri Weiss (CA Bar No.&nbsp;79225)</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">401 B Street, Suite 1700</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">San Diego, CA 92101-4297</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(619)&nbsp;699-3650</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Attorneys for the Individual Defendants and Nominal Defendant LRAD Corporation</FONT></P></TD></TR>
</TABLE></DIV>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">18 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit B </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">IROQUOIS MASTER FUND, LTD.,</FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:8.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Plaintiff,</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
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<TD HEIGHT="8"></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:4.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">v.</FONT></P></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="text-indent:2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">C.A. No. 7704-VCP</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">RAYMOND C. SMITH, LAURA M. CLAGUE,</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">HELEN C. ADAMS, THOMAS R. BROWN</FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">and KATHERINE McDERMOTT,</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:8.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Defendants,</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:4.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">and</FONT></P></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">LRAD CORPORATION,</FONT></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:8.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Nominal Defendant.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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</TABLE> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>ORDER AND FINAL JUDGMENT </U></B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>WHEREAS</B>, a hearing was held before this Court on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2013
pursuant to this Court&#146;s Scheduling Order With Respect to Notice and Settlement Hearing, dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2013 (the &#147;Scheduling Order&#148;), and upon a Stipulation of
Settlement dated May &nbsp;&nbsp;&nbsp;&nbsp;, 2013 (the &#147;Stipulation&#148;) outlining a settlement of the above-captioned action (the &#147;Action&#148;), which is incorporated herein by reference. The parties appeared by their attorneys of
record. The Court heard and considered the submissions and evidence presented in support of the proposed settlement and the application for an award of attorneys&#146; fees and expenses. The opportunity to be heard was given to all other persons
requesting to be heard in accordance with the Scheduling Order. The Court considered, among other matters, the benefits of the proposed Stipulation and the risks, complexity, expense and probable duration of further litigation. The
</FONT></P>

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proposed Stipulation and the application for an award of attorneys&#146; fees and expenses was heard and considered by the Court. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This Order and Final Judgment (&#147;Judgment&#148;) incorporates by reference the definitions in the Stipulation and, unless otherwise
defined, all capitalized terms shall have the same meanings as set forth in the Stipulation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>IT IS ORDERED, ADJUDGED AND
DECREED</B>, this &nbsp;&nbsp;&nbsp;&nbsp; day of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2013 that: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1. The Court finds that Plaintiff and Plaintiff&#146;s Counsel have adequately represented the interests of LRAD Corporation (&#147;LRAD&#148; or the &#147;Company&#148;) and Current LRAD Stockholders
with respect to the Action, the claims asserted therein, and all Released Claims. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. The Court finds that the Stipulation is
fair, reasonable, adequate, and in the best interests of LRAD and Current LRAD Stockholders. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3. This Court approves the
Stipulation in all respects, and the parties are directed to consummate the settlement in accordance with the terms of the Stipulation. The Register in Chancery is directed to enter and docket this Judgment. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4. The Notice of Pendency and Settlement of Action (the &#147;Notice&#148;) has been given to all Current LRAD Stockholders pursuant to
and in the manner directed by the Scheduling Order, proof of mailing, and other dissemination of the Notice was filed with the Court and full opportunity to be heard has been offered to all parties, current stockholders of the Company, and persons
in interest. The Court finds that the form and means of the Notice was the best notice practicable under the circumstances and was given in full compliance with the requirements of Court of Chancery Rule 23.1 and due process of law, and that all
Current LRAD Stockholders are bound by this Judgment. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5. This Court has jurisdiction over the subject matter of the Action, including all matters
necessary to effectuate the Stipulation and this Judgment and over all parties to the Action, including Plaintiff, Current LRAD Stockholders and all Defendants (including nominal defendant LRAD). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">6. The Action and all claims contained therein, as well as all of the Released Claims, are dismissed with prejudice. As between Plaintiff
and Defendants, the parties are to bear their own costs, except as otherwise provided in the Stipulation and in this Judgment. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">7. Except as otherwise provided in the Stipulation, Plaintiff (on its own behalf and derivatively on behalf of LRAD), Plaintiff&#146;s
Counsel, LRAD, and each and every Current LRAD Stockholder claiming by, through, in the right of, derivatively, or on behalf of LRAD, by operation of this Judgment, fully, finally, and forever release, relinquish and discharge the Released Persons
from any and all of the Released Claims. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8. Except as otherwise provided in the Stipulation, each of Released Persons, by
operation of this Judgment, fully, finally, and forever release, relinquish and discharge Plaintiff, Plaintiff&#146;s Counsel, LRAD, and each and every Current LRAD Stockholder claiming by, through, in the right of, derivatively, or on behalf of
LRAD from any and all claims arising from the institution or prosecution of the Actions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">9. Except as otherwise provided in
the Stipulation, the parties (including LRAD) are permanently and finally enjoined from instituting, commencing, prosecuting, continuing, or in any way participating in, whether directly or indirectly, representatively, individually, derivatively on
behalf of LRAD, or in any other capacity, any action or other proceeding asserting any Released Claims against any or all of the Released Persons or any party, or their respective attorneys. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">10. Nothing in this Judgment shall in any way impair or restrict the rights of the
Defendants (including nominal defendant LRAD) or the rights of any party to enforce the terms of the Stipulation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">11.
Plaintiff&#146;s Counsel are awarded attorneys&#146; fees and expenses in the sum of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; which the Court finds to be fair and reasonable, to be paid by LRAD in accordance with the terms of the
Stipulation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">12. Neither the Stipulation, this Judgment, nor any act performed or document executed pursuant to or in
furtherance of the Stipulation: (a)&nbsp;is or may be deemed or offered or received in evidence as a presumption, a concession, or an admission of any fault, liability, or wrongdoing, and except as required to enforce this Stipulation, shall not be
offered or received in evidence or otherwise used by any party in any action, whether civil, criminal, or administrative; or (b)&nbsp;shall be interpreted as an admission of liability or wrongdoing on the part of the Individual Defendants, nor an
admission on the part of Plaintiff of any lack of merit of the claims asserted in the Action. Notwithstanding the foregoing, LRAD and any of the Individual Defendants may file the Stipulation, or any judgment or order of the Court related hereto, in
any action that has been or may be brought against them, in order to support a claim or defense based on principles of res judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction, or any other theory of claim
preclusion or issue preclusion or similar defense or counterclaim. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">13. Without affecting the finality of this Judgment in any
way, the Court reserves jurisdiction over all matters and disputes relating to the Stipulation and this Judgment, and may enter additional orders as may from time to time be necessary to implement and enforce the
</FONT></P>

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Stipulation and this Judgment. Nothing herein dismisses or releases any claim by or against any party to the Stipulation arising out of a breach of the Stipulation or violation of this Judgment.
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vice Chancellor</FONT></TD></TR>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>EXHIBIT C </U></B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">IROQUOIS MASTER FUND, LTD.,</FONT></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:8.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Plaintiff,</FONT></P></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:4.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">v.</FONT></P></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">C.A. No. 7704-VCP</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">RAYMOND C. SMITH, LAURA M. CLAGUE,</FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">HELEN C. ADAMS, THOMAS R. BROWN</FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">and KATHERINE McDERMOTT,</FONT></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:8.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Defendants,</FONT></P></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:4.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">and</FONT></P></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">LRAD CORPORATION,</FONT></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:8.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Nominal Defendant.</FONT></P></TD>
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</TABLE> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULING ORDER WITH RESPECT </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TO NOTICE AND SETTLEMENT HEARING </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>WHEREAS</B>, the parties to the above-captioned action (the &#147;Action&#148;) have entered into a Stipulation of Settlement dated May&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2013 (the
&#147;Stipulation&#148;), which sets forth the terms and conditions for the proposed settlement and dismissal with prejudice of the Action, subject to review and approval by this Court pursuant to Court of Chancery Rule 23.1 upon notice to the
current stockholders of nominal defendant LRAD Corporation (&#147;LRAD&#148;); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>NOW</B>, upon application of the parties,
after review and consideration of the Stipulation filed with the Court and the exhibits annexed thereto, </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>IT IS HEREBY
ORDERED </B>this &nbsp;&nbsp;&nbsp;&nbsp; day of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2013 as follows: </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. A hearing (the &#147;Settlement Hearing&#148;) shall be held on
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2013, at &nbsp;&nbsp;&nbsp;&nbsp; .m. in the Court of Chancery, New Castle County Courthouse, 500 North King Street, Wilmington, Delaware 19801, to (a)&nbsp;determine whether
the proposed settlement, on the terms and conditions provided for in the Stipulation, is fair, reasonable, and adequate and in the best interests of LRAD and its current stockholders; (b)&nbsp;determine whether the Court should finally approve the
Stipulation and enter the Order and Final Judgment (the &#147;Judgment&#148;) as provided in the Stipulation, dismissing the Action with prejudice and extinguishing and releasing the Released Claims (as defined in the Stipulation); (c)&nbsp;hear and
determine any objections to the proposed settlement; (d)&nbsp;rule on plaintiff&#146;s counsel&#146;s Fee and Expense Application (as defined in the Stipulation); and (e)&nbsp;rule on such other matters as the Court may deem appropriate. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. The Settlement Hearing may be adjourned by the Court from time to time without further notice to anyone other than the parties to the
Action and any Objectors (as defined herein). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3. The Court reserves the right to approve the Stipulation at or after the
Settlement Hearing with such modifications as may be consented to by the parties to the Stipulation and without further notice. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4. The Court approves, in form and content, the Notice of Pendency of Settlement of Action (the &#147;Notice&#148;) filed by the parties
with the Stipulation as Exhibit D and finds that the giving of notice substantially in the manner set forth herein meets the requirement of Court of Chancery Rule 23.1 and due process, and is the best notice practicable under the circumstances. No
less than sixty (60)&nbsp;calendar days prior to the Settlement Hearing, LRAD shall cause the Notice, substantially in the form annexed as Exhibit D to the Stipulation, to be distributed, by First-Class Mail (or by more expedient means), to all
Current LRAD Stockholders at their </FONT></P>

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respective addresses currently set forth in LRAD&#146;s stock records, if known. Additionally, LRAD shall use reasonable efforts to give notice to all beneficial owners of common stock of LRAD by
providing additional copies of the Notice to any record holder requesting the Notice for purposes of distribution to such beneficial owners. All of the expenses related to the distribution of the Notice shall be paid in accordance with the terms of
the Stipulation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5. At least ten (10)&nbsp;court days prior to the Settlement Hearing, LRAD shall file an appropriate
affidavit attesting to provision of the Notice in accordance with this Order. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">6. As set forth in the Notice, any record or
beneficial stockholder of LRAD who objects to the Stipulation, the proposed Judgment to be entered, and/or the Fee and Expense Application who wishes to be heard (&#147;Objector&#148;), may appear in person or by his, her, or its attorney at the
Settlement Hearing and present any evidence or argument that may be proper and relevant; <U>provided</U>, <U>however</U>, that no Objector shall be heard or entitled to contest the approval of the terms and conditions of the settlement, or, if
approved, the Judgment to be entered thereon, unless he, she, or it has, no later than ten (10)&nbsp;business days before the Settlement Hearing (unless the Court in its discretion shall thereafter otherwise direct, upon application of such person
and for good cause shown), filed with the Register in Chancery, Court of Chancery, New Castle County Courthouse, 500 North King Street, Wilmington, Delaware 19801, and served (electronically, by hand, or by overnight mail) on counsel, at the
addresses below, the following: (a)&nbsp;proof of current ownership of LRAD stock; (b)&nbsp;a written notice of the Objector&#146;s intention to appear; (c)&nbsp;a detailed statement of the objections to any matter before the Court; and (d)&nbsp;a
detailed statement of all of the grounds thereon and the reasons for the Objector&#146;s desire to appear and to be heard, as well as all documents or writings which the Objector desires the Court to consider. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Jessica Zeldin, Esq. </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Rosenthal Monhait&nbsp;&amp; Goddess, P.A. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">919 Market Street, Suite 1401 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Citizens Bank Center </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">P.O. Box 1070 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Wilmington, DE 19899 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">jzeldin@rmgglaw.com </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Attorneys for Plaintiff Iroquois Master Fund, Ltd.
</I></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">John L. Reed, Esq. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">DLA Piper LLP </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">919 N. Market Street, Suite 1500 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Wilmington, DE 19801 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">john.reed@dlapiper.com </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Attorneys for Defendants Raymond C. Smith,
</I></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Laura M. Clague, Helen C. Adams, Thomas R. Brown </I></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>and Katherine McDermott and Nominal Defendant LRAD Corporation </I></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">7. Any person or entity who fails to object in the manner prescribed above shall be deemed to have waived such objection (including the
right to appeal), unless the Court in its discretion allows such objection to be heard at the Settlement Hearing, and shall forever be barred from raising such objection in this Action or any other action or proceeding or otherwise contesting the
Stipulation, or the Fee and Expense Application, and will otherwise be bound by the Judgment to be entered and the releases to be given. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">8. At least thirty (30)&nbsp;business days prior to the Settlement Hearing, plaintiff&#146;s counsel shall file with the Court a brief in support of the settlement, and plaintiff&#146;s counsel&#146;s Fee
and Expense Application. Any objections to the Fee and Expense Application by defendants shall be filed and served no later than fifteen (15)&nbsp;business days prior to the Settlement Hearing. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">9. At least five (5)&nbsp;business days prior to the Settlement Hearing, the parties may file with the Court a response brief to any
objections made by an Objector pursuant to Paragraph 6, </FONT></P>

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above, and plaintiff may file and serve a brief response to any objections to the Fee and Expense Application. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">10. In the event that the Stipulation is not approved by the Court, the settlement and any actions taken in connection therewith shall become null and void for all purposes, and all negotiations,
transactions, and proceedings connected with it: (a)&nbsp;shall be without prejudice to the rights of any party thereto; (b)&nbsp;shall not be deemed to be construed as evidence of, or an admission by any party of any fact, matter, or thing; and
(c)&nbsp;shall not be admissible in evidence or be used for any purpose in any subsequent proceedings in the Action or any other action or proceeding. The parties shall be deemed to have reverted to their respective status in the Action as of the
date and time immediately prior to the execution of the Stipulation, and, except as otherwise expressly provided, the parties shall proceed in all respects as if the Stipulation and any related orders had not been entered. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">11. All discovery and other proceedings in this Action (except as may be necessary to carry out the terms and conditions of the proposed
settlement) are hereby stayed and suspended until further order of the Court. Except as provided in the Stipulation, pending final determination of whether the Stipulation should be approved, all parties to the Action are hereby enjoined against
instituting, commencing, prosecuting, continuing, or in any way participating in, whether directly, representatively, individually, derivatively on behalf of LRAD, or in any other capacity, any action or other proceeding asserting any Released
Claims. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">12. The Court may, for good cause shown, extend any of the deadlines set forth in this Order without further notice
to anyone other than the parties to the Action and any Objectors. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vice Chancellor</FONT></TD></TR>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit D </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">IROQUOIS MASTER FUND, LTD.,</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:8.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Plaintiff,</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
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<TD HEIGHT="8"></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD HEIGHT="8"></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:4.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">v.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="text-indent:2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">C.A. No. 7704-VCP</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">RAYMOND C. SMITH, LAURA M. CLAGUE,</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">HELEN C. ADAMS, THOMAS R. BROWN</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">and KATHERINE McDERMOTT,</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:8.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Defendants,</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:4.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">and</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">LRAD CORPORATION,</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">:</FONT></TD>
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<TD VALIGN="top"> <P STYLE="text-indent:8.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Nominal Defendant.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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</TABLE> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>NOTICE OF PENDENCY OF SETTLEMENT OF ACTION</U> </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TO: ALL CURRENT STOCKHOLDERS OF LRAD CORPORATION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>(TRADING SYMBOL: LRAD) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR
RIGHTS WILL BE AFFECTED BY THE LEGAL PROCEEDINGS IN THIS LITIGATION. IF THE COURT APPROVES THE PROPOSED SETTLEMENT, YOU WILL BE FOREVER BARRED FROM CONTESTING THE FAIRNESS, REASONABLENESS, AND ADEQUACY OF THE PROPOSED SETTLEMENT, OR PURSUING THE
CLAIMS DEFINED HEREIN. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>IF YOU HOLD LRAD CORPORATION COMMON STOCK FOR THE BENEFIT OF ANOTHER, PLEASE PROMPTLY TRANSMIT THIS DOCUMENT TO
SUCH BENEFICIAL OWNER. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>IF YOU DO NOT OBJECT TO THE PROPOSED SETTLEMENT OR THE ATTORNEYS&#146; FEE AND EXPENSE AWARD, DESCRIBED IN THIS
NOTICE, YOU ARE NOT OBLIGATED TO TAKE ANY ACTION. </B></FONT></P>

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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>I.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>WHY ARE YOU RECEIVING THIS NOTICE?</U> </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The purpose of this Notice is to tell you about: (i)&nbsp;a lawsuit (the &#147;Action&#148;) in the Delaware Court of Chancery (the &#147;Delaware Court&#148;) brought on behalf of LRAD Corporation
(&#147;LRAD&#148; or the &#147;Company&#148;); (ii)&nbsp;a proposal to settle the Action as provided in a Stipulation of Settlement (the &#147;Stipulation&#148;); and (iii)&nbsp;your right, among other things, to attend and participate in a hearing
to be held on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2013 at &nbsp;&nbsp;&nbsp;&nbsp;.m., in the Court of Chancery, New Castle County Courthouse, 500 North King Street, Wilmington, Delaware 19801 (the
&#147;Settlement Hearing&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This Notice describes the rights you may have under the Stipulation and what steps you may,
but are not required to, take concerning the proposed settlement. If the Court approves the Stipulation, the parties will ask the Delaware Court to approve an Order and Final Judgment that would end the Action. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>THE FOLLOWING DESCRIPTION DOES NOT CONSTITUTE FINDINGS OF ANY COURT. IT IS BASED ON STATEMENTS OF THE PARTIES AND SHOULD NOT BE
UNDERSTOOD AS AN EXPRESSION OF ANY OPINION OF ANY COURT AS TO THE MERITS OF ANY OF THE CLAIMS OR DEFENSES RAISED BY ANY OF THE PARTIES. </B></FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>II.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>BACKGROUND: WHAT IS THE ACTION ABOUT?</U> </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Plaintiff Iroquois Master Fund, Ltd., (&#147;Iroquois&#148; or &#147;Plaintiff&#148;) is a current LRAD stockholder. Plaintiff is represented by Rosenthal, Monhait&nbsp;&amp; Goddess, P.A., and Abbey
Spanier, LLP (collectively, &#147;Plaintiff&#146;s Counsel&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Nominal defendant LRAD is a Delaware corporation with its
principal place of business in San Diego, California. Defendants Raymond C. Smith, Laura M. Clague, Helen C. Adams, Thomas R. Brown and Katherine McDermott (collectively, the &#147;Individual Defendants&#148;) are present or former officers and/or
directors of LRAD. Defendants Smith, Clague and Adams comprised the Compensation Committee of the LRAD Board of Directors. LRAD develops and delivers innovative directed acoustic products that beam, focus, and control sound over short and long
distances, primarily for use by government, military, law enforcement and security entities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On May&nbsp;10, 2012, the
Compensation Committee granted 975,000 nonqualified stock options to the Company&#146;s Officers and Directors with strike prices set at the stock&#146;s closing price on the NASDAQ stock market on May&nbsp;10, 2012 of $1.33 per share (the
&#147;Stock Option Grants&#148;), pursuant to the Equity Incentive Plan. Specifically, the Compensation Committee awarded 750,000 options to LRAD&#146;s CEO, Brown; 100,000 options to LRAD&#146;s CFO, McDermott; 50,000 options to each of
Compensation Committee members, Clague and Smith; and 25,000 options to Compensation Committee member Adams. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On July&nbsp;23,
2012, Iroquois filed the Action in the Delaware Court derivatively on behalf of LRAD against the Individual Defendants, claiming that the Individual Defendants breached </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
their fiduciary duties of loyalty in connection with the issuance of the Stock Option Grants. Defendants moved to dismiss the complaint. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On November&nbsp;19, 2012, Plaintiff filed its Verified Amended Shareholder Derivative Complaint (the &#147;Amended Complaint&#148;),
asserting claims for breach of fiduciary duty arising out of the Stock Option Grants. In the Amended Complaint, Iroquois alleged that the stock options granted on May&nbsp;10, 2012 were undervalued and timed to coincide with negative earnings
announcements, and to precede positive announcements concerning future sales contracts. The Amended Complaint alleged claims for breach of fiduciary duty, unjust enrichment, and waste. Defendants filed a motion to dismiss the Amended Complaint on
December&nbsp;17, 2012. The motion to dismiss was fully briefed and argued on March&nbsp;4, 2013 and has not been decided by the Court. The Individual Defendants have denied and continue to deny that they have committed any act or omission giving
rise to any breach of fiduciary duty, liability, and/or violation of law. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On January&nbsp;17, 2013, Iroquois, on behalf of
itself and other investors in LRAD, delivered a letter to the Company expressing an intention to nominate director candidates (the &#147;Nomination Letter&#148;) for election to the Board at the Company&#146;s 2013 Annual Meeting. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In or about February, 2013, the Parties entered into settlement negotiations concerning the Action and the Nomination Letter. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In or about May, 2013, the Parties reached resolutions of the Action and of certain matters related to the 2013 Annual Meeting, including
the Nomination Letter. The documents embodying those resolutions consist of the Stipulation settling the Action and a settlement agreement resolving the matters related to the 2013 Annual Meeting (the &#147;Investors Settlement Agreement&#148;),
which were executed simultaneously with each other. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In settlement of the Action and in consideration of releases described
below and in the Stipulation, defendants have agreed to amend Defendant Brown&#146;s Stock Option Grants to reprice from $1.33 to $3.00 the strike price of each of the 750,000 non-qualified stock options granted to him on May&nbsp;10, 2012. The
settlement of the Action and the application by Plaintiff&#146;s Counsel for an award of attorneys&#146; fees and expenses are subject to the approval of the Delaware Court. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In resolution of the matters related to the 2013 Annual Meeting, including the Nomination Letter, the parties have agreed that LRAD&#146;s Nominating and Corporate Governance Committee will recommend the
nomination of defendants Brown and Clague, as &#147;Continuing Directors,&#148; and of General John G. Coburn, Dennis J. Wend and Richard H. Osgood III as new directors for election at the 2013 Annual Meeting, which meeting shall be held no later
than June&nbsp;30 2013. In addition the parties have agreed to a voting agreement, a standstill agreement and releases of any claims. LRAD has also agreed to reimburse Iroquois and the other investors for the legal and advisory fees (including the
proxy solicitor&#146;s fees) incurred in connection with the Nomination Letter and the Investors Settlement Agreement. Said fees and expenses in the amount of $301,496 have now been paid by LRAD. As set forth below, none of the foregoing fees have
been incurred by or paid to Plaintiff&#146;s Counsel in the Action. The Company reserves the right to argue that legal and advisory fees paid in connection with the Nomination Letter and </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>


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Investors Settlement Agreement should reduce the amount awarded in connection with the settlement of the derivative action. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The foregoing is a summary of the resolution of the matters related to the 2013 Annual Meeting. The Investors Settlement Agreement dated
as of May&nbsp;21, 2013 is annexed as Exhibit A to the Stipulation filed in the Delaware Court. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Investors Settlement
Agreement provides that execution of the settlement embodied in the Stipulation and the parties&#146; cooperation in the submission of the Stipulation to the Delaware Court were conditions to the Investors Settlement Agreement. The Investors
Settlement Agreement, which is final and binding upon its execution and thus not subject to the Delaware Court&#146;s approval, is not conditioned on the Delaware Court&#146;s approval of the settlement embodied in the Stipulation. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>III.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>HOW WAS THE SETTLEMENT REACHED?</U> </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In February 2013, the parties commenced settlement negotiations. The Stipulation was later signed by all parties on May&nbsp;21, 2013. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>THE COURT HAS NOT FINALLY DETERMINED THE MERITS OF PLAINTIFF&#146;S CLAIMS OR THE DEFENSES THERETO. THIS NOTICE DOES NOT IMPLY THAT
THERE HAS BEEN OR WOULD BE ANY FINDING OF VIOLATION OF THE LAW BY THE INDIVIDUAL DEFENDANTS OR THAT RECOVERY COULD BE HAD IN ANY AMOUNT IF THE ACTION WAS NOT SETTLED. </B></FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>IV.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>WHAT ARE THE TERMS OF THE SETTLEMENT?</U> </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Under the Stipulation, Defendant Brown has agreed to reprice the strike price of each and every of the 750,000 non-qualified stock options granted to him on May&nbsp;10, 2012 from $1.33 to $3.00. The
repricing shall occur within three business days of the Effective Date of the settlement, assuming that an Effective Date occurs. Defendant Brown has agreed not to exercise any of the 750,000 options that are the subject of the settlement pending
the Effective Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Because the Action was brought for the benefit of LRAD, any recovery in the Action (whether from this or
any settlement or through a judgment in favor of the Plaintiff) would go to LRAD. LRAD stockholders will not receive any direct payment as a result of the Stipulation and will not need to fill out any kind of claims form as a result of the
settlement. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>V.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>WHAT CLAIMS WILL THE SETTLEMENT RELEASE?</U> </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>Under the Stipulation, the following releases will occur, except as noted below:</I></B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Plaintiff (on its own behalf and derivatively on behalf of LRAD), Plaintiff&#146;s Counsel, LRAD, and each and every current LRAD stockholder claiming by, through, in the right of, derivatively, or on
behalf of LRAD, shall fully, finally, and forever release, relinquish, and </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">4 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
discharge the Released Persons (as defined below) from any and all of the Released Claims (as defined below). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Each of the Released Persons (as defined below) shall fully, finally, and forever release, relinquish, and discharge Plaintiff, Plaintiff&#146;s Counsel and LRAD from any and all claims arising out of,
relating to or in connection with the institution, prosecution, assertion, settlement or resolution of the Action or the Released Claims. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The &#147;Released Persons&#148; include: the Individual Defendants and their heirs, estates, executors, administrators, personal or legal representatives, beneficiaries, spouses, insurers, attorneys,
advisors or assigns and any entity in which an Individual Defendant and/or member of his or her family has an interest, or any trust of which an Individual Defendant is the settlor or which is for the benefit of any Individual Defendant and/or
member of his or her family. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The &#147;Released Claims&#148; include: any and all claims (including Unknown Claims) for
relief of any nature whatsoever or causes of action, debts, demands, rights, liabilities, damages, actions, losses, obligations, judgments, suits, fees, expenses, costs, matters, issues and causes of action, known or unknown, contingent or absolute,
suspected or unsuspected, disclosed or undisclosed, concealed or hidden, or matured or unmatured, direct or derivative, that were or could have been asserted in the Action derivatively or otherwise, or by Plaintiff against LRAD or the Released
Persons, based on or relating to the facts, transactions, events, occurrences, acts, disclosures, statements, or omissions that were alleged or could have been alleged in the Action or the subject matter or allegations of the Action. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>VI.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>WHAT ARE THE REASONS FOR SETTLING THE ACTION?</U> </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Plaintiff and Plaintiff&#146;s Counsel believe that the claims asserted in the Action have merit and that Plaintiff&#146;s Counsel&#146;s investigation supports the claims asserted, but also believe that
the settlement set forth above provides substantial and immediate benefits for LRAD and its current stockholders. Plaintiff and its counsel have taken into account the uncertain outcome and the risk of any litigation, especially in complex
stockholder litigation such as the Action, as well as the difficulties and delays inherent in such litigation. Plaintiff and Plaintiff&#146;s Counsel also are mindful of inherent problems of proof associated with, and possible defenses to, the
violations asserted in the Action. In addition, Plaintiff and Plaintiff&#146;s Counsel recognize and acknowledge the expense and length of continued proceedings necessary to prosecute the Action against the Individual Defendants through trial and
appeals. Based upon these considerations, among others, Plaintiff and Plaintiff&#146;s Counsel have concluded that the terms and conditions of the Stipulation confer substantial benefits upon and are in the best interests of LRAD and its
stockholders. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Individual Defendants deny that they have committed or intended to commit any wrongdoing or violations of
law arising out of any of the conduct, statements, acts, or omissions alleged in the Action, and maintain that their conduct was at all times proper and in compliance with applicable law. The Individual Defendants also deny that LRAD was harmed by
any conduct of the Individual Defendants alleged in the Action or that could have been alleged therein. Each of the Individual Defendants asserts that, at all relevant times, he or she acted in
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
good faith and in a manner he or she reasonably believed to be in the best interests of LRAD and its shareholders. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Individual Defendants, however, recognize the uncertainty and the risk inherent in any litigation, and the difficulties and substantial burdens, expense, and length of time that may be necessary to
defend this proceeding through the conclusion of discovery, summary judgment motions, trial, post-trial motions, and appeals. Individual Defendants wish to eliminate the uncertainty, risk, burden and expense of further litigation, and to permit the
operation of LRAD without further distraction and diversion of its directors and executive personnel with respect to the Action. Individual Defendants have therefore determined to settle the Action on the terms and conditions set forth in this
Stipulation and to put the Released Claims to rest finally and forever, without in any way acknowledging any wrongdoing, fault, liability, or damages. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">LRAD has considered the merits of Plaintiff&#146;s allegations, the Individual Defendants&#146; defense, and the legal fees and costs it has incurred and will continue to incur as a result of this Action.
LRAD agreed to settle the Action pursuant to the terms described herein because it believes that it is desirable for LRAD to avoid incurring additional legal fees and to avoid the distractions associated with litigation. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>VII.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>HOW WILL THE ATTORNEYS GET PAID?</U> </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">To date, Plaintiff&#146;s Counsel in the Action have not received any payments for their efforts on behalf of LRAD and its stockholders. If the Delaware Court approves the Stipulation, Plaintiff&#146;s
Counsel shall apply to the Delaware Court for an award of attorneys&#146; fees and expenses (the &#147;Fee and Expense Application&#148;) of no more than $340,000, which amount represents less than the amount that would have billed on this matter at
Plaintiff&#146;s Counsel&#146;s typical hourly rates with no contingency multiplier. LRAD has agreed to pay any award of attorneys&#146; fees and expenses awarded by the Delaware Court after all rights to an appeal have been exhausted, and
Defendants have reserved all rights to oppose the Fee and Expense Application. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Court approval of the Stipulation is not in
any way conditioned on the Delaware Court approving the Fee and Expense Application. Disallowance by the Delaware Court of the Fee and Expense Application, or any portion thereof, any appeal from any order relating thereto, and any modification or
reversal on appeal of any such order, will not operate to terminate or cancel the Stipulation or affect its other terms, including the releases, or affect or delay the finality of the Judgment approving the Stipulation. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">All of Defendants&#146; own legal fees, costs, and expenses incurred in the Action will be borne by Defendant LRAD. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">6 </FONT></P>


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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>VIII.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>WHEN WILL THE SETTLEMENT HEARING TAKE PLACE?</U> </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Delaware Court has scheduled a Settlement Hearing to be held on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2013 at &nbsp;&nbsp;&nbsp;&nbsp;.m., in the Court of Chancery,
New Castle County Courthouse, 500 North King Street, Wilmington, Delaware 19801. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The purpose of the Settlement Hearing is to:
(i)&nbsp;determine whether the proposed Stipulation is fair, reasonable, and adequate and in the best interests of LRAD and its stockholders and should be approved by the Court; (ii)&nbsp;determine whether an Order and Final Judgment should be
entered dismissing the Delaware case with prejudice and extinguishing and releasing all of the claims raised in the Action against the Released Persons; (iii)&nbsp;determine whether the Delaware Court should approve Plaintiff&#146;s Counsel&#146;s
Fee and Expense Application; (iv)&nbsp;hear and determine any objections to the proposed settlement; and (v)&nbsp;rule on such other matters as the Delaware Court may deem appropriate. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Court may adjourn the Settlement Hearing from time to time without further notice to anyone other than the parties to the Action and
any Objectors (as defined below). The Delaware Court reserves the right to approve the Stipulation at or after the Settlement Hearing with such modifications as may be consented to by the parties to the Stipulation and without further notice.
</FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>IX.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>DO I HAVE A RIGHT TO APPEAR AND OBJECT?</U> </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Any record or beneficial stockholder of LRAD who objects to the settlement, the judgment proposed to be entered, and/or Plaintiff&#146;s Counsel&#146;s Fee and Expense Application, or who otherwise wishes
to be heard (an &#147;Objector&#148;), may appear in person or by his, her, or its attorney at the Settlement Hearing and present any evidence or argument that may be proper and relevant; <U>provided</U>, <U>however</U>, that no Objector shall be
heard or entitled to contest the approval of the terms and conditions of the Stipulation, or, if approved, the judgment to be entered thereon, unless he, she, or it has, no later than ten (10)&nbsp;business days before the Settlement Hearing (unless
the Delaware Court in its discretion shall thereafter otherwise direct, upon application of such person and for good cause shown), filed with the Register in Chancery, Court of Chancery, New Castle County Courthouse, 500 North King Street,
Wilmington, Delaware 19801, and served (electronically, by hand, or overnight mail) on plaintiff&#146;s and defendants&#146; counsel, at the addresses below, the following: (i)&nbsp;proof of current ownership of LRAD stock; (ii)&nbsp;a written
notice of the Objector&#146;s intention to appear; (iii)&nbsp;a detailed statement of the objections to any matter before the Delaware Court; and (iv)&nbsp;a detailed statement of all of the grounds thereon and the reasons for the Objector&#146;s
desire to appear and to be heard, as well as all documents or writings which the Objector desires the Court to consider. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">7 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Jessica Zeldin, Esq. </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Rosenthal Monhait&nbsp;&amp; Goddess, P.A. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">919 Market Street, Suite 1401 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Citizens Bank Center </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">P.O. Box 1070 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Wilmington, DE 19899 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">jzeldin@rmgglaw.com </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Attorneys for Plaintiff Iroquois Master Fund Ltd.</I>
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">John L. Reed, Esq. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">DLA Piper LLP </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">919 N. Market Street, Suite 1500 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Wilmington, DE 19801 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">john.reed@dlapiper.com </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Attorneys for Defendants Raymond C. Smith,</I>
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Laura M. Clague, Helen C. Adams, Thomas R. Brown</I> </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>and Katherine McDermott and Nominal Defendant LRAD Corporation</I> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Any person or entity who fails to object in the manner prescribed above shall be deemed to have waived such objection (including the
right to appeal), unless the Delaware Court in its discretion allows such objection to be heard at the Settlement Hearing, and shall forever be barred from raising such objection in the Action or any other action or proceeding or otherwise
contesting the Stipulation or the Fee and Expense Application, and will otherwise be bound by the Judgment to be entered and the releases to be given. You are not required to appear in person at the Settlement Hearing in order to have your timely
and properly filed objection considered. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>X.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>WHAT ARE THE TERMS OF THE PROPOSED ORDER AND FINAL JUDGMENT?</U> </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">If the Court determines that the Stipulation is fair, reasonable, adequate, and in the best interests of LRAD and its stockholders, the parties shall jointly request that the Delaware Court enter an Order
and Final Judgment, which will, among other things: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. Approve the Stipulation and adjudge the terms thereof to be fair,
reasonable, adequate, and in the best interests of LRAD and its stockholders, pursuant to Court of Chancery Rule 23.1; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.
Determine that appropriate notice of the Action, the Stipulation, the Settlement Hearing, and the right to appear was provided pursuant to Court of Chancery Rule 23.1. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">3. Authorize and direct the parties to consummate the settlement in accordance with the terms and conditions of the Stipulation and reserve jurisdiction to supervise the consummation of the Stipulation
provided therein; </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">8 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4. Dismiss the Action with prejudice in accordance with the terms of the Stipulation and
grant the releases described more fully above and in accordance with the terms and conditions of the Stipulation; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5. Grant
Plaintiff&#146;s Counsel&#146;s Fee and Expense Application, as the Delaware Court deems appropriate; </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>XI.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>WHAT SHOULD I DO IF I AM A BENEFICIAL OWNER?</U> </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Brokerage firms, banks and/or other persons or entities who hold shares of LRAD common stock for the benefit of others are requested to promptly send this Notice to all of their respective beneficial
owners. If additional copies of the Notice are needed for forwarding to such beneficial owners, any requests for such information may be made to: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Katherine H. McDermott </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief Financial Officer </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">LRAD Corporation </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">16990 Goldentop Road </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">San Diego, California 92127 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: (858)&nbsp;676-0515 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>kmcdermott@lradx.com</U> </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>XII.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>HOW DO I GET ADDITIONAL INFORMATION ABOUT THE SETTLEMENT?</U> </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">This Notice is not all-inclusive. The references in this Notice to the pleadings in the Action, the Stipulation and other papers and proceedings are only summaries and do not purport to be comprehensive.
For the full details of the Action, claims that have been asserted by the parties, and the terms and conditions of the settlement, including a complete copy of the Stipulation, stockholders of LRAD are referred to the Court files in the Action. You
or your attorney may examine the Delaware Court files during regular business hours of each business day at the office of the Register in Chancery, Court of Chancery, New Castle County Courthouse, 500 North King Street, Wilmington, Delaware 19801.
Questions about the settlement or about this Notice in general may be addressed to Plaintiff&#146;s Counsel: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Judith L.
Spanier, Esq. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Abbey Spanier, LLP </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%;padding-bottom:0px; "><FONT
STYLE="font-family:Times New Roman" SIZE="2">212 East 39</FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">th</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2">
Street </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">New York, New York 10016 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Telephone: (212)&nbsp;889-3700 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">jspanier@abbeyspanier.com </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>PLEASE DO NOT WRITE OR CALL THE COURT </I></B></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9 </FONT></P>


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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">BY ORDER OF THE COURT OF CHANCERY FOR THE STATE OF DELAWARE</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dated: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2013</FONT></TD>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>EXHIBIT C </U></B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mutual Press Release </FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 99.1 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>LRAD CORPORATION ANNOUNCES SETTLEMENT AGREEMENT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>WITH IROQUOIS MASTER
FUND LTD. AND </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SCHEDULES ANNUAL MEETING OF STOCKHOLDERS </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Three New Independent Directors to Stand for Election </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>SAN DIEGO, CA, May&nbsp;22, 2013 &#150; LRAD Corporation (NASDAQ: LRAD</B>) announced today that it has reached an agreement with Iroquois Master Fund Ltd. and certain of its affiliates (collectively
&#147;Iroquois&#148;), under which two new independent directors proposed by Iroquois and a third new independent director mutually selected by the Company and Iroquois will stand for election in place of three independent members of the
Company&#146;s current Board of Directors. As part of the agreement, Iroquois will vote all of its shares in support of the new slate of five directors consisting of current directors Thomas R. Brown and Laura M. Clague, and new directors General
John G. Coburn, Dennis J. Wend and Richard H. Osgood III, at the Company&#146;s 2013 Annual Meeting. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;We believe this agreement is in
the best interests of the Company and our stockholders,&#148; stated Tom Brown, chairman, president and CEO of LRAD Corporation. &#147;We appreciate the service and contributions of our outgoing independent directors, Admiral Raymond Smith, Helen
Adams and Bill VanDeWeghe. Their knowledge and guidance over the years have been valuable to the Board. We look forward to working together with our new Board members on expanding our business and increasing long term stockholder value.&#148;
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company and Iroquois have also agreed to settle the pending derivative lawsuit brought by Iroquois, subject to approval by the Delaware
Court of Chancery, with the Company agreeing to amend Mr.&nbsp;Brown&#146;s May 2012 stock option grant by raising the strike price from $1.33 to $3.00. The Company also agreed to pay certain Iroquois legal and advisory fees. Iroquois has agreed to
certain standstill restrictions that expire prior to the Company&#146;s 2014 Annual Meeting. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;We are delighted to have settled with LRAD
amicably and believe that General John G. Coburn, Dennis J. Wend and Richard H. Osgood III will enhance the composition of the Board,&#148; said Richard Abbe, co-founder and managing partner of Iroquois Capital, LP. &#147;We look forward to working
constructively together with the Board and management team to help maximize value for all stockholders.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">General Coburn is chairman and
CEO of Vision Technologies Systems Inc. VT Systems provides engineering solutions, products, integrated systems, and services in the Americas across the core business areas of aerospace, electronics, land systems and marine. Headquartered in
Alexandria, Virginia, VT Systems operates around the globe and offers a broad range of proven innovative services to both the commercial and government sectors. General Coburn became the Chairman of VT Systems in November 2001. Subsequently, he grew
the company from $61 million in revenue to over $1 billion in 2008. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">General Coburn retired from the United States Army in 2001 after 39 years
of service. His last assignment was Commanding General, U.S. Army Materiel Command (AMC). AMC, with an annual budget of $39.2 billion, is one of the largest commands in the Army with almost </FONT></P>

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51,000 employees and activities in 42 states and more than 28 foreign countries. General Coburn was directly responsible for acquisition, contracting, research and development, foreign military
sales, industrial base development, ammunition, program management and sustainment for the U.S. Army. General Coburn is a distinguished military graduate of Eastern Michigan University where he was commissioned as a second lieutenant of Infantry.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mr.&nbsp;Wend is the President of Wend&nbsp;&amp; Associates Inc., a technology based consulting company working with various government
agencies and private sector firms to optimize leveraging activities. Prior to founding Wend&nbsp;&amp; Associates in 2007, Mr.&nbsp;Wend served for over 27 years as a civilian with the U.S. Army in various jobs in procurement, logistics and weapon
systems management as the Director of the National Automotive Center and Executive Director for Technology Transfer, where he was involved in all program aspects, including the management and direction of 18 manufacturers throughout the country,
executing approximately $1 billion of production. Mr.&nbsp;Wend is a graduate of the Pentagon&#146;s Defense System Management College and holds an undergraduate degree from the Detroit Institute of Technology. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mr.&nbsp;Osgood has spent the bulk of his 30+ year career in investment banking at the helm of Pacific Growth Equities. Founded in 1991, Mr.&nbsp;Osgood
acted as president, chairman, CEO, COO and executive chairman of Pacific Growth until its acquisition by Wedbush Securities in January 2009. He then spent two years as the head of Equity Capital Markets for Wedbush. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pacific Growth was a boutique investment bank and institutional brokerage firm that serviced companies in high growth sectors such as life sciences,
clean technology and information technology. During his time at Pacific Growth, Mr.&nbsp;Osgood executed 200 managed transactions, raising more than $5 billion in proceeds. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Mr.&nbsp;Osgood is also an active supporter and board member of numerous non-profit organizations, including the Salvation Army. He currently sits on the investment committee for the Western Territory, as
well as their Advisory Board in San Francisco. As chairman of the San Francisco board for five years, Mr.&nbsp;Osgood was instrumental in a major capital campaign that resulted in the building of a $100 million community center in one of San
Francisco&#146;s poorer neighborhoods. Mr.&nbsp;Osgood graduated cum laude from the University of the South. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company also announced that
its annual meeting of stockholders has been scheduled for July&nbsp;17, 2013 at its corporate offices. Stockholders of record as of May&nbsp;24, 2013 will be eligible to vote for the proposed slate of directors and other proposals for consideration
that will be included in the Company&#146;s proxy statement scheduled for filing with the Securities and Exchange Commission (SEC). </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>About
LRAD Corporation </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">LRAD Corporation is using long range communication to resolve uncertain situations peacefully and save lives on both
sides of its proprietary Long Range Acoustic Device&reg;. LRAD&reg; systems are in service around the world in diverse applications including fixed and mobile military deployments, maritime security, critical infrastructure and perimeter security,
commercial security, border and port security, law enforcement and emergency responder communications, emergency warning and mass notification, asset protection, and wildlife </FONT></P>

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preservation and control. For more information about the Company and its LRAD systems, please visit www.lradx.com. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Important Additional Information </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">This release may be deemed to be solicitation material in
respect to the election of directors to the Board of Directors of the Company. The Company will be filing a proxy statement with the SEC. <B>STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE
FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION</B>. Stockholders will be able to receive the proxy statement and other relevant documents free of charge at the SEC&#146;s website at www.sec.gov, or upon
written request to the Secretary of LRAD Corporation at 16990 Goldentop Road, Ste. A, San Diego, California 92127. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company and its
directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the election of directors to the Board of Directors of the Company. Information regarding
the interests of participants in the solicitation of proxies in respect of the 2013 Annual Meeting will be included in the Company&#146;s proxy statement to be filed with the SEC. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Forward-looking Statements</B>: This release contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. We base these statements on
particular assumptions that we have made in light of our industry experience, the stage of product and market development as well as our perception of historical trends, current market conditions, current economic data, expected future developments
and other factors that we believe are appropriate under the circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements. These risks and
uncertainties are identified and discussed in our filings with the SEC. These forward-looking statements are based on information and management&#146;s expectations as of the date hereof. Future results may differ materially from our current
expectations due to a variety of factors including, among others, general economic conditions, our dependence on a limited number of customers, our dependence on continued sales to U.S. and international governments and businesses that sell to
governments, our ability to obtain financing on favorable terms, or at all, and our ability to expand our customer base and the acceptance of our products. For more information regarding other potential risks and uncertainties, see the &#147;Risk
Factors&#148; section of the Company&#146;s Form 10-K for the fiscal year ended September&nbsp;30, 2012. The Company disclaims any intent or obligation to update those forward-looking statements, except as otherwise specifically stated. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">FOR FURTHER INFORMATION CONTACT: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Robert Putnam
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(858) 676-0519 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">robert@lradx.com
</FONT></P>
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