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EXHIBIT 10.15
MANUFACTURING AND
DISTRIBUTION AGREEMENT
This Agreement is between Rockford Corporation, an Arizona
corporation ("Rockford"), and Path Group Inc., an Arizona corporation ("Path").
Rockford and Path agree as follows:
1. BACKGROUND.
1.1 Rockford Business. Rockford is a manufacturer of high quality
consumer electronic products used in automotive, professional,
and home sound reproduction systems.
1.2 Path Business and Experience. Path was formerly known as
"American Connection Incorporated," and is an affiliate of
Path Group PLC, a British corporation ("Path UK"). Path is a
successor to American Connection, Ltd., a British corporation
("ACL"), and is a manufacturer and supplier of accessory
products that may be used in the installation of Rockford's
products and other company's products. All references to Path
in this Agreement include Path and ACL.
1.3 Past Relationship. Rockford and Path are parties to agreements
relating to Rockford's distribution of Path products in
Europe, the United States, the Americas, and Asia as listed on
Exhibit D, Prior Agreements (the "Prior Agreements").
1.4 New Relationship. Rockford and Path desire to renew and revise
their existing agreements relating to Rockford's distribution
of Path products. Under the new agreement, Path will
manufacture (or purchase) and warehouse accessory products
(the "Products"). Rockford will solicit sales of the Products
to Rockford's authorized dealers and distributors throughout
the world ("Dealers"). The Products covered by this Agreement
are identified on Exhibit A; the parties may at any time add
other products to those identified by amending Exhibit A and
the added products will then be treated for all purposes as
"Products."
1.5 License. In connection with this Agreement, Rockford will
license Path to place certain Rockford trademarks and
tradenames (the "Names") on the Products, solely for sales of
the Products to Dealers. The Names are identified on Exhibit
B, which may be amended by the parties from time to time.
1.6 Purpose. The purpose of this Agreement is to replace the Prior
Agreements. This Agreement states the terms of the agreement
between Path and Rockford relating to sales of the Products to
Rockford's Dealers.
(*) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL MATERIAL HAS BEEN REDACTED
AND FILED SEPARATELY WITH THE COMMISSION.
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2. DISTRIBUTION OF THE PRODUCTS. Path will manufacture (or purchase) and
warehouse the Products. Rockford will solicit sales of the Products
and, upon receipt of orders, will ship the Products to Rockford's
Dealers throughout the world. The parties will undertake these
activities on the following basis:
2.1 Inventory Locations. Path will manufacture or purchase the
Products and will maintain an inventory of the Products at its
own warehouses and at selected Rockford warehouse locations.
Path must insure the Products against casualty loss prior to
their shipment to Dealers.
(a) Duty and Freight. Path is responsible for payment of
applicable duty and freight to deliver the Products
to each warehouse location.
(b) Changes to Locations. Path is responsible for costs
and systems improvements at its own warehouse
locations and at Rockford's warehouse locations (to
the extent needed to keep Path inventory at such
locations), including equipment and license fees to
operate the locations. Rockford is not responsible
for any equipment or license fees related to any
changes to warehouse locations (including movements
into Rockford warehouses).
(c) Europe and Singapore. In Europe and Singapore, Path
will own Products and locate them at Rockford's
warehouse in Germany and Singapore until their sale
to Dealers.
(d) Germany. Path shall pay the value added tax (VAT)
upon entry of goods into the warehouse in Germany and
shall charge the VAT to Rockford on sales from the
warehouse in Germany.
2.2 Inventory Levels. Path will maintain inventory at a level that
is sufficient to satisfy reasonably expected demand for the
Products.
(a) Representatives of Rockford and Path will meet
regularly to discuss anticipated demand for the
Products and the level of inventory appropriate to
allow Rockford and Path to meet that demand.
(b) Path is responsible for end-of-life ("EOL") inventory
management, including inventory levels and EOL
discounts. If Path wants to offer EOL discounts to
help manage inventory, Rockford will arrange to offer
the discounts to Dealers using free goods or other
means consistent with Rockford's sales practices for
its own products.
(c) Upon termination of this Agreement, Rockford will in
good faith assist Path to liquidate Path's reasonable
inventory of the Products. These good faith efforts
will include Rockford's continued ordering of the
Products
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from Path until the reasonable inventory of each
Product is exhausted, but only to the extent Rockford
has orders from Dealers for the Products.
2.3 Responsibilities of the Parties.
(a) Rockford. Rockford will manage sales of the Products,
including order taking, shipping from Rockford
warehouses, invoicing to Rockford's customers, terms
offered to Rockford's customers, bad debts, and
marketing programs. Rockford will solicit sales of
the Products to Rockford's Dealers and will use the
sales methods it deems appropriate, which may (but
are not required to) include dealer visits,
telemarketing, direct mail, and advertising.
(b) Path. Path will ship Products from its own warehouses
to fill orders submitted to it by Rockford and will
follow Rockford's established procedures for
confirming to Rockford the quantities and dates of
shipment (including submission of entries to
Rockford's information systems) so that Rockford can
timely invoice its Dealers. Path will not make any
independent sales of the Products, but will:
(1) assist Rockford's sales staff and sales
representatives in their efforts to sell the
Products;
(2) make available to Rockford's Dealers
point-of-purchase materials, including
product displays (subject to Rockford's
approval and reasonable budgetary
constraints established by Path); and
(3) provide support as necessary in the form of
technical information or advisory personnel.
(c) Promotional Literature. Rockford is responsible for
development, production, and distribution of all
literature regarding the Products and for the cost
associated with exhibits, booths, and audio-visual
presentations at trade shows. Path is responsible for
development, production, and distribution of display
and point of sale materials for Dealer sites and
written material used for Dealer training. Rockford
and Path will consult with each other with respect to
the content and appearance of such materials.
(d) Cooperation. Path will cooperate with Rockford's
efforts so that, for all purposes, Dealers are
encouraged to treat the Products as Rockford products
and to deal directly with Rockford on all matters
related to the Products.
2.4 Orders and Delivery. Rockford may remove the Products from
Path's inventory at Rockford's warehouses and deliver the
Products to Rockford's Dealers upon
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receipt of orders for the Products. Rockford will promptly
give Path notice of the shipment of Products from Rockford's
warehouses.
2.5 Price and Payment.
(a) Price. After consultation with Rockford, Path will
establish Dealer Prices and suggested retail prices
for each Product in each region or territory.
Rockford will sell the Products at the applicable
Dealer Price, subject to reasonable payment, volume,
and other sales incentives that are consistent with
the incentives Rockford offers on its own products.
(b) Payments by Dealers and Credit Risk. Rockford is
solely responsible for collecting amounts due for
sales of Products. Rockford is also responsible for
managing its credit relationship with its Dealers and
may establish, in connection with its acceptance of
orders and shipment of Products, reasonable credit
policies including, as it deems necessary,
requirements for COD sales only.
(c) Payments by Rockford to Path. Path will submit
invoices to Rockford for all Products shipped in the
amounts established under Exhibit C. Rockford will
make payments in accordance with the terms set forth
on Exhibit C. All payments will be in U.S. Dollars at
the Path location designated by Path.
(d) Returns. Rockford will accept returns of Products on
a basis consistent with Rockford's policies for
returns. Rockford will deliver returned Product to
Path and is entitled to a credit for the net amount
Rockford paid Path for the returned Product.
(e) Discounts. (*)
2.6 Additional Names and Products. At its execution, this
Agreement covers only Products sold in connection with
Rockford's "Rockford-Fosgate" line of car audio products. The
parties are discussing an arrangement for sales of Products in
connection with Rockford's "Hafler" line of professional audio
products. If the parties agree on terms for such an
arrangement, they may execute a separate agreement covering
that arrangement or they may amend Exhibits A, B, and C to add
the Hafler related Products to this Agreement with appropriate
variations in the terms of those Exhibits.
3. DEVELOPMENT AND ADDITION OF PRODUCTS.
3.1 Development of Products. Rockford and Path will cooperate to
improve existing Products and develop new Products that will
satisfy the needs of Rockford's Dealers, and their customers.
Path is principally responsible for development of
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(*) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL MATERIAL HAS BEEN REDACTED
AND FILED SEPARATELY WITH THE COMMISSION.
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improvements to existing Products and new Products. Before the
development of new or improved Products the parties will meet
and agree upon:
(a) the anticipated role of each party in development of
the Product;
(b) any change in the marketing and administrative fees
or royalty necessary for the Product; and
(c) ownership of patents, trade secrets, copyrights and
other intellectual property associated with the
Product (other than the Names, which will remain
Rockford's exclusive property).
3.2 Addition of Products. Path will not produce or sell any
Products, and will not use the Names in connection with any
Products, until Rockford has approved such Products and added
them to Exhibit A as approved Products. When a Product is
approved and added to Exhibit A, Rockford and Path will also
agree whether the Product is to be "exclusive" under the terms
of this Agreement. Except as otherwise specifically agreed by
Rockford and Path, all Products will be exclusive.
3.3 Deletion of Products. Rockford and Path will discontinue
Products as they reasonably determine is necessary because of
obsolescence, inadequate sales, or new product developments.
3.4 Use of Products After Termination. Upon termination of this
Agreement, Path may manufacture, sell, and distribute
products, including tools, that were principally or
exclusively marketed through Rockford during the term of this
Agreement, except for products protected by Rockford patents
and products produced using Rockford's trade secrets,
confidential information, or other intellectual property. Path
may not use the Names in connection with any such products.
Path and its affiliates will own patents, trade secrets,
confidential information, and other intellectual property
associated with all Products Path or its affiliates develop
exclusively for Rockford. For example:
(a) all tools and dies, sketches, designs, drawings,
forms, software, software manuals, source codes, and
other information and tangible property associated
with development of or manufacturing of the Products
Path or its affiliates develop exclusively for
Rockford will remain the property of Path unless Path
grants licenses or other rights to Rockford; and
(b) the "Gamma Geometry" cable designed by Ixos (patents
applied for), which Path is licensed to manufacture
for certain Products, will remain the property of
Path's affiliate, Ixos, Ltd.
4. USE OF NAMES.
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4.1 Limited License of Names. Rockford grants Path a right to use
the Names solely during the term of this Agreement and solely
in connection with sales of the Products to Rockford's
Dealers.
4.2 Approval of Uses. Path will use the Names only in a manner and
form approved before use in writing by Rockford. If Path
wishes to propose a new use or form of the Names, it must
submit its proposal in writing to Rockford. Rockford will
promptly review the proposed use and indicate its approval or
disapproval in writing. Any proposed use will be deemed
approved if Rockford does not object within 30 business days
after Path submits it to Rockford in writing together with a
written request for approval.
4.3 Quality of Products. Path will provide Rockford with initial
samples of each Product before any sale and Rockford must
approve the initial samples before any sale of a Product. Path
will provide Rockford with production samples from time to
time, as requested by Rockford, so that Rockford may confirm
that the Products conform to the approved samples and to
Rockford's requirements as to quality. All Products supplied
by Path will be of a quality at least equal to the initial
samples supplied to Rockford.
4.4 Goodwill and Ownership of Names. All goodwill generated by the
use of the Names or promotion of the Products will accrue to
Rockford's benefit. Path disclaims any ownership rights in the
Names and goodwill of Rockford, acknowledges that the Names
are the sole and exclusive property of Rockford, and agrees
that it will not take any action challenging Rockford's
ownership and rights in the Names. Path will not (a) take any
action that would interfere with Rockford's use of the Names
or (b) file applications for registration of the Names
anywhere in the world.
4.5 Infringements. If Path believes any other party is infringing
on Rockford's rights in the Names, then Path will promptly
notify Rockford and will cooperate with Rockford in any action
Rockford chooses to take to protect its rights in the Names.
Rockford will have sole and exclusive control of any actions
relating to such infringements.
4.6 No Use after Termination. Upon expiration or termination of
this Agreement, Path will immediately cease using the Names
other than for sales permitted after termination under the
termination provisions of this Agreement.
5. EXCLUSIVITY AND NON-COMPETE.
5.1 Mutual Exclusivity. In connection with "exclusive" Products
(including those identified on Exhibit A and others deemed
exclusive under section 3.2) and solely during the term of
this Agreement:
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(a) Rockford will not sell (or license others to sell)
products that compete with the exclusive Products;
and
(b) Neither Path nor any affiliate of Path will sell (or
license others to sell) products that compete with
the exclusive Products.
The parties may agree that a Product is exclusive only in part
of the world, in which case the restrictions in (a) and (b)
will apply only in the part of the world where the product is
exclusive.
5.2 Non-Compete. Neither Path nor its affiliates will:
(a) during the term of this Agreement (and for one year
after its termination if termination is a result of
any breach by Path or a result of Path's election not
to renew this Agreement), either directly or through
any affiliate, offer for sale any products that are
competitive with an exclusive Product (for a Product
that is exclusive in only part of the world, this
restriction applies only in the part of the world
where the Product is exclusive); and
(b) during or at any time after the term of this
Agreement, offer for sale any products using the
Names, or using names, marks, or other trade dress
that are confusingly similar to the Names, other than
Products sold under this Agreement.
6. MANAGEMENT MEETINGS. Management of Rockford and Path will meet
quarterly at Rockford's headquarters in Tempe, Arizona, to discuss the
business relationship and resolve issues arising between the parties.
7. WARRANTY, TITLE, AND INDEMNITY.
7.1 Warranty to Dealers. Rockford will offer warranties for the
Products consistent with the warranties offered by Rockford
for its own products. Rockford will require that Dealers and
their customers return Products requiring warranty service to
Rockford.
7.2 Path Warranty and Service Procedures. Path warrants that the
Products will be free from defects in material and workmanship
for the period of the warranty offered by Rockford. Rockford
will deliver Products requiring warranty service to Path, Path
will repair or exchange returned Products, and Path will
return the Products to Rockford's Dealers, or their customers,
at its sole expense.
7.3 Encumbrances, Title, and Risk of Loss. Path warrants that the
Products, upon shipment, will be free from any security
interest, lien, or other encumbrance. Path will transfer title
to the Products free and clear of all security interests,
liens, and other encumbrances. Risk of loss from any casualty
to the Products will be on Path until their receipt and
acceptance by Rockford's Dealers.
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7.4 Indemnification and Insurance.
(a) Indemnity by Rockford. Rockford will defend,
indemnify and hold harmless Path, and its officers,
directors, employees, and agents, from:
(1) all fines, suits, proceedings, claims,
demands, debts, obligations, liabilities or
actions of any kind by anyone (including
reasonable attorneys' fees and costs) (a
"Loss") arising from or connected with the
activities or operations of Rockford or its
officers, directors, employees, or agents;
(2) all Loss arising out of claims by third
parties that Path's authorized use of the
Names infringed on the marks or other rights
of such third parties; and
(3) all Loss in product liability actions
brought against Path involving the defective
manufacture or design of Rockford products.
Rockford will maintain product liability insurance
with insurers and in amounts reasonably satisfactory
to Path. Such insurance will name Path as an
additional insured on a form reasonably approved by
Path and will be cancelable by the insurer only after
30 days notice to Path.
(b) Indemnity by Path; Product Liability Insurance. Path
will defend, indemnify and hold harmless Rockford,
and its officers, directors, employees, and agents,
from:
(1) all Loss arising from or connected with the
activities or operations of Path or its
officers, directors, affiliates, employees,
or agents; and
(2) all Loss in product liability actions
brought against Rockford involving the
defective manufacture or design of Products;
except that Path will have no obligation to
defend, indemnify, or hold harmless from
liability resulting from Rockford's acts or
omissions in the design of the Products.
Path will maintain product liability insurance with
insurers and in amounts reasonably satisfactory to
Rockford. Such insurance will name Rockford as an
additional insured on a form reasonably approved by
Rockford and will be cancelable by the insurer only
after 30 days notice to Rockford.
(c) Procedure. A party must give notice to the other
party of any claim as to which it intends to seek
indemnity under this Agreement promptly after the
indemnified party learns of the claim. The
indemnifying party is entitled to assume the defense
of any claim and, if it does so, is not
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thereafter responsible for the expenses of
independent counsel retained by the indemnified
party. The indemnified party will cooperate in the
defense of the claim and will not settle or
compromise any claim without the indemnifying party's
consent.
8. TERM AND TERMINATION.
8.1 Initial Term. This Agreement is for an initial term from July
1, 1998 until July 31, 2001.
8.2 Renewal Term. On or before January 31, 2001, Rockford and Path
will meet to evaluate the business relationship and to decide
whether to continue the relationship for two additional years.
The Agreement will renew unless either Rockford or Path gives
written notice that they elect not to extend the term of the
Agreement. If the Agreement is extended, the Agreement will
renew for one additional two year renewal term.
8.3 Additional Renewal. After the renewal term, the parties may
renew this Agreement each year for additional two year terms,
but only if both parties give written notice of renewal at
least 180 days before a scheduled expiration.
8.4 Termination. A party may terminate this Agreement, at any time
and upon written notice to the other, in any of the following
events:
(a) If the other party breaches any material term of this
Agreement, and fails to correct such breach within 30
days after notice from the party;
(b) If the other party suspends payment of its debts,
enters into or becomes subject to corporate
reorganization or rehabilitation procedures,
liquidation, dissolution, or bankruptcy proceedings,
or makes a composition with creditors, or makes an
assignment for the benefit of creditors, or seeks
relief under bankruptcy or other similar laws for
debtor's relief; or
(c) If the performance of the Agreement by either party
is prevented by force majeure, and the condition
continues to prevent performance for 90 days.
8.5 Specific Performance. In addition to its right to terminate,
Rockford has the right to obtain temporary and permanent
injunctive relief to prevent any breach or threatened breach
by Path or its affiliates of sections 4, 5 or 9 of this
Agreement. Path has the right to obtain temporary and
permanent injunctive relief to prevent any breach or
threatened breach by Rockford or its affiliates of sections 5
or 7 of this Agreement.
8.6 Termination Events. Upon expiration or termination of this
Agreement:
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(a) the parties will settle any amounts due between them
within 30 days;
(b) Path will cease to make, use, or sell the Rockford
branded Products, except that Path may continue to
sell such Products pursuant to sales orders submitted
to it by Rockford on behalf of its Dealers. Path may
make such sales only out of inventory held by Path at
the time of termination or shipped to Path as a
result of orders outstanding at the time of
termination. Rockford will in good faith assist Path
to liquidate Path's reasonable inventory of the
Products. These good faith efforts will include
Rockford's continued ordering of the Products from
Path until the reasonable inventory of each Product
is exhausted, but only to the extent Rockford has
orders from Dealers for the Products;
(c) Path will continue to honor warranty claims and
returns of Products sold by Rockford and delivered to
Rockford's Dealers and their customers; and
(d) Path will maintain inventories of service parts for
the periods required by law.
Termination or expiration will not limit or exclude any and
all other rights of the parties (including rights to recover
damages, to offset damages against any amounts due, and to
equitable relief) and will not act as an election of remedies.
9. CONFIDENTIAL INFORMATION. Rockford will maintain in confidence all
Confidential Information of Path, and Path will maintain in confidence
all Confidential Information of Rockford, on the following terms:
9.1 Definitions. In this Agreement:
(a) "Information" means information about:
(1) business or marketing plans, strategies,
concepts, and data (including costs and
pricing);
(2) research and development activities;
(3) products, product plans, technical
specifications, technology, hardware,
software, systems, and designs;
(4) trade secrets, formulas, copyrighted
materials, packaging, and Marks;
(5) manufacturing processes and methods
(including line speeds, ▇▇▇▇▇▇▇ requirements
and layout);
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(6) existing or potential customers, suppliers,
methods, and techniques; and
(7) other accumulated technical knowledge or
information.
(b) "Confidential Information" means Information of one
party which is disclosed to the other and is
identified as confidential when disclosed.
Confidential Information does not include Information
that
(1) is or becomes publicly known through no
wrongful act of the receiving party;
(2) is, at the time of disclosure, already known
to the receiving party;
(3) is rightfully and without breach of this
Agreement in the receiving party's
possession without any obligation
restricting use or disclosure;
(4) is independently developed by the receiving
party without breach of this Agreement or
reference in any way to Confidential
Information; or
(5) is furnished by the disclosing party to a
third party without a similar restriction on
the third party's rights.
9.2 Maintaining Confidence. Each party will retain the other's
Confidential Information in confidence and will not reproduce,
copy, or disclose Confidential Information to any third party.
Each party will exercise at least the same care to preserve
the confidentiality of Confidential Information as it uses to
preserve the confidentiality of its own information of like
importance.
9.3 Use of Confidential Information. Each party will use the
other's Confidential Information only in connection with the
manufacture and distribution of the Products. Rockford will
not use Path's Confidential Information for its own direct
benefit (other than in the sale of Products as specifically
permitted by this Agreement) or to benefit any third party
other than Path. Path will not use Rockford's Confidential
Information for its own direct benefit (other than in the
manufacture of Products as specifically permitted by this
Agreement) or to benefit any third party other than Rockford.
9.4 Rights to Disclose. Each party may disclose the other's
Confidential Information only to the extent disclosure is
either:
(a) required by law (except that, to the extent permitted
by law, each party must first give the other notice
and a reasonable time to obtain a protective order
limiting disclosure and use of the information); or
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(b) released with the other's written consent.
9.5 Return of Confidential Information. Each party will, upon the
other's request, return all the requesting party's
Confidential Information and deliver to the requesting party
all notes, memoranda, and analyses relating to or derived from
the requesting party's Confidential Information. Neither party
will keep or use for itself, or disclose to any third party,
copies of the other's Confidential Information except with the
other's written consent.
9.6 No License. No license in Confidential Information is granted
to the other party, other than to use Confidential Information
in the manner and to the extent authorized by this Agreement.
Each party will retain title and full ownership rights to all
of its Confidential Information.
10. INDEPENDENT CONTRACTOR RELATIONSHIP. Path and Rockford are independent
contractors responsible for hiring their own employees, exercising sole
and absolute discretion, judgment and control over the management and
day-to-day operations of their respective businesses, and achieving the
objectives of their businesses. This Agreement does not create a
relationship of principal and agent, franchisor and franchisee, joint
venture, partnership or employment. Neither party is liable for any
obligations incurred by the other except as expressly provided in this
Agreement. Neither party will act or represent itself, directly or by
implication, as an agent of the other with any authority other than as
set forth expressly in this Agreement.
11. NOTICES. Notices under this Agreement must be in writing and are
effective upon delivery, in person or by facsimile, or three days after
mailing, first class mail, postage prepaid and return receipt
requested, to the addresses stated on the signature page of this
Agreement (which may be changed by notice). Notices sent by facsimile
must be confirmed by mailing (in the same manner as mailed notices),
but are effective upon receipt of the facsimile transmission.
12. AMENDMENT AND WAIVER. This Agreement is the entire agreement of the
parties, and supersedes all prior agreements and undertakings with
respect to its subject matter. This Agreement may be amended only by a
written document signed by both parties. The delay or failure of a
party to exercise any rights under this Agreement, or a partial
exercise of such rights, will not constitute a waiver of such rights.
Any waiver of a right, obligation or default must be in writing and
signed by all parties. A waiver of one right, obligation or default
will not be construed as a waiver of any other or subsequent right,
obligation or default.
13. GOVERNING LAW. Arizona substantive law will govern this Agreement and
any dispute arising out of or in any way relating to this Agreement or
the parties' relationship under this Agreement.
14. JURISDICTION AND VENUE. The exclusive jurisdiction and venue for any
dispute arising out of or in any way relating to this Agreement or the
parties' relationship under this
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Agreement is in the Superior Court for Maricopa County, Arizona, or in
the Federal District Court for the District of Arizona. Each party
consents to the jurisdiction of such courts for this purpose.
15. WAIVER OF JURY TRIAL. Any dispute arising out of or in any way relating
to this Agreement or the parties' relationship under this Agreement
will be tried to the court, without a jury, and each party hereby
irrevocably waives any right to request a jury trial in connection with
such a dispute.
16. DISCLAIMER OF DAMAGES. Path and Rockford irrevocably waive and
relinquish any right to recover incidental, consequential, or punitive
damages in any dispute arising out of or in any way relating to this
Agreement or the parties' relationship under this Agreement.
17. ATTORNEYS' FEES. In any proceeding arising out of this Agreement, the
prevailing party is entitled to reasonable attorneys' fees, costs and
other expenses incurred in connection with such proceeding.
18. SEVERABILITY. If any provision of this Agreement is deemed contrary to,
prohibited by, or invalid under applicable law, or is inoperative for
any reason, that provision will be deemed modified to the extent
necessary to make it valid and operative, or if it cannot be so
modified, then severed. The remainder of this Agreement will continue
in full force and effect as if the Agreement had been signed with the
invalid provision so modified or eliminated.
19. NO THIRD PARTY BENEFICIARIES. This Agreement will not create any third
party beneficiary rights.
20. TERMINATION OF PRIOR AGREEMENTS. Rockford and Path are parties to two
existing agreements governing distribution of Products in,
respectively, Europe (for the first agreement) and the United States,
Americas, and Pacific Rim. This Agreement replaces and supercedes both
of the earlier agreements, which are terminated when this Agreement is
effective. Both parties acknowledge that this Agreement makes
significant changes in the business arrangements relating to
distribution of the Products.
21. EXECUTION AND EFFECTIVE DATE. This Agreement is executed and accepted
in Tempe, Arizona, on June 11, 1998, and is effective on July 1, 1998.
Path Group Inc., an Arizona corporation
By /s/
Its: President
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Address: Path Group Inc.
c/o Path Group PLC
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Road, High
Wycombe
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Fax:
Rockford Corporation, an Arizona corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Vice President Finance & CFO
Address: Rockford Corporation
Attn: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Fax:
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EXHIBIT A
PRODUCTS
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EXHIBIT B
LICENSED ROCKFORD NAMES
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EXHIBIT C
SCHEDULE OF INVOICES AND PAYMENTS
Amount Due. Rockford will pay Path, and Path may invoice Rockford for, the
Dealer Price less:
(1) a discount from the Dealer Price of (*) for sales to all
Dealers other than those who order from Rockford's European
price sheet;
(2) a discount from the Dealer Price of (*) for sales to all
Dealers who order from Rockford's European price sheet;
(3) an additional discount from the Dealer Price of (*) of the
Dealer Price for sales above (*) of the worldwide sales
target. The additional discount will commence when aggregate
gross shipments of the Products as established by Rockford's
shipping records for the year reach (*) of the plan target
gross shipments worldwide. Rockford will establish plan target
gross shipments in consultation with Path. Rockford will
notify Path promptly when aggregate gross shipments reach this
target.
Due Date. Rockford will pay Path the amount of the invoice within 7 days after
Path submits the invoice to Rockford.
Net Payments. Rockford may net the amount due from Path to Rockford on account
of returns or for other matters against Path's invoices.
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(*) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL MATERIAL HAS BEEN REDACTED
AND FILED SEPARATELY WITH THE COMMISSION.
18
EXHIBIT D
PRIOR AGREEMENTS
[List prior agreements superseded by this agreement]
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