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                                                                   Exhibit 10.40


                            STOCK PURCHASE AGREEMENT



                                      Among

                         AI Research, Inc. ("Company"),

                          The Shareholders of Company,
              ("Shareholders" and, together with Company, "Seller")

                                       and

                       Rockford Corporation ("Purchaser")


                            Dated as of June 16, 2001
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                            STOCK PURCHASE AGREEMENT*

This Stock Purchase Agreement ("Agreement") is between:

         -        AI Research, Inc. ("Company");

         -        all shareholders of Company, as identified on the signature
                  page of this Agreement, ("Shareholders" and, together with
                  Company, "Seller"); and

         -        Rockford Corporation ("Purchaser").

Seller and Purchaser agree as follows:

1.       BACKGROUND AND DEFINITIONS.

         1.1      Company Business Company manufactures and sells custom speaker
                  enclosures for car audio systems and engages in other related
                  business (the "Business");

         1.2      Acquisition. Shareholders have agreed to sell to Purchaser all
                  of Company's common stock. Purchaser and Seller have agreed to
                  complete the acquisition on the terms described in this
                  Agreement;

         1.3      Shareholders. Shareholders hold all of Company's currently
                  outstanding Shares;

         1.4      Purpose. The purpose of this Agreement is to state the terms
                  of Purchaser's acquisition of the Shares;

         1.5      Definitions. In this Agreement:

                  (a)      Affiliate means any Person who controls, is
                           controlled by, or is under common control with
                           another Person (directly or indirectly, alone or
                           together with others);

                  (b)      Agreement means this Agreement and each of the
                           Schedules and certificates delivered with this
                           Agreement. The Schedules and certificates are a part
                           of this Agreement;

                  (c)      Business has the meaning given in Section 1.1 and
                           includes all operating parts of AI including Q-Logic,
                           Kenwood OEM, and Garage Storage Cabinets operations;

                  (d)      Closing means the consummation of the transactions
                           contemplated by this Agreement;

                  (e)      Closing Date means the day on which the Closing
                           actually takes place;

                  (f)      Company means AI Research, Inc., an Oklahoma
                           corporation;

                  (g)      Contract means any contract, indenture, mortgage or
                           deed of trust, lease, purchase order, guaranty,
                           insurance policy, bond, license, instrument,
                           understanding, obligation, or other agreement. A
                           Contract may be written or oral;

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

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                  (h)      Employment Contracts means all Contracts related to
                           employment, including both individual agreements and
                           collective bargaining agreements;

                  (i)      Employment Plans means all executive compensation
                           plans, bonus plans, holiday and other bonus
                           practices, deferred compensation agreements, pension
                           or retirement plans, employee stock option or stock
                           purchase plans, employee life, heath, and accident
                           insurance, and other employee benefit plans,
                           agreements, arrangements or commitments;

                  (j)      Encumbrance means any mortgage, pledge, lien, claim,
                           charge, security interest, restriction, easement,
                           right of way, or other liability that is a charge
                           against an asset;

                  (k)      Environmental Laws means all Laws relating to the
                           environment or Hazardous Materials, including the
                           Comprehensive Environmental Response, Compensation
                           and Liability Act of 1980, as amended by the
                           Superfund Amendments and Reauthorization Act of 1986
                           ("CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic
                           Substance Control Act ("TSCA"), 15 U.S.C. Section
                           2601 et seq; the Hazardous Materials Transaction Act,
                           49 U.S.C. Section 1802 et seq; the Resource
                           Conservation and Recovery Act ("RCRA"), 42 U.S.C.
                           Section 9601 et seq; the Clean Water Act ("CWA"), 33
                           U.S.C. Section 1251 et seq; the Safe Drinking Water
                           Act, 42 U.S.C. Section 300(f) et seq; the Clean Air
                           Act ("CAA"), 42 U.S.C. Section 7401 et seq; the
                           Federal Insecticide, Fungicide and Rodentcide Act
                           ("FIFRA), 7 U.S.C. Section 136 et seq; and the Solid
                           Waste Disposal Act ("SWDA") 42 U.S.C. Section 6901
                           et seq;

                  (l)      Financial Statements and Financial Statement Date
                           have the meaning given in Section 6.8;

                  (m)      Government means any legislature, executive,
                           department, administrative agency, municipality,
                           subdivision, instrumentality, or other authority of
                           the United States, any state, any locality, or any
                           foreign country or political subdivision of a foreign
                           country;

                  (n)      Hazardous Materials means hazardous wastes, hazardous
                           substances, hazardous constituents, toxic substances,
                           pollutants, contaminants, radioactive materials,
                           related materials, and any other substances,
                           constituents or wastes, whether solids, liquids or
                           gases, subject to regulation under any Environmental
                           Laws;

                  (o)      Information means information supplied to Purchaser
                           by Company or Shareholder under Section 8.8 of this
                           Agreement;

                  (o1)     Kenwood OEM means the business described in the
                           unexecuted document attached as Exhibit 1.5(o1).

                  (p)      Laws means any law, statute, ordinance, rule,
                           regulation, or Order;

                  (q)      Loss means all expenses (including reasonable
                           attorneys and accountants fees), losses, taxes,
                           claims, damages, awards, fines, interest, penalties,
                           and liabilities net of related income tax benefits,
                           if any;
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                  (r)      Order means any order, decree, decision, injunction,
                           finding, or judgment;

                  (s)      Permits means approvals, permits, licenses, filings,
                           registrations, certificates, orders, authorizations,
                           qualifications, or other consents from any
                           Government, self-regulatory authority, or any other
                           third party;

                  (t)      Person means any individual person and any
                           corporation, partnership, joint venture, limited
                           liability company, or other entity;

                  (u)      Proceeding means any claim, action, suit, mediation,
                           arbitration, labor grievance, Government
                           investigation, or other legal or administrative
                           proceeding;

                  (v)      Properties means all properties and assets reflected
                           in Company's financial statements or in Schedule
                           6.17;

                  (w)      Purchase Price means the purchase price of the Shares
                           equal to $4,500,000 payable as set forth in this
                           Agreement, subject to adjustment and deductions as
                           provided in Section 4 of this Agreement;

                  (x)      Purchaser means Rockford Corporation, an Arizona
                           corporation;

                  (y)      Security Rights means all subscriptions, options,
                           warrants, calls, contracts, demands, commitments,
                           convertible securities, preemptive or other
                           agreements or arrangements to acquire common stock or
                           other securities of a Person;

                  (z)      Seller means Company or Shareholders;

                  (aa)     Shareholders means each of the Persons who own Shares
                           (of record or beneficially). Shareholders are
                           identified on Schedule 6.6;

                  (bb)     Shareholders' Representative means the representative
                           selected by Shareholders pursuant to Section 8.9 who
                           is authorized to act on behalf of Shareholders;

                  (cc)     Shares means:

                           (1)      outstanding common stock of Company, and

                           (2)      outstanding Security Rights to acquire
                                    common or preferred stock of Company; and

                  (dd)     Tax means any tax, assessment, duty, or governmental
                           charge or deposit, including income, property, ad
                           valorem, gross receipts, sales, use, value added,
                           transaction privilege, occupation, franchise,
                           transfer, excise, goods and services, payroll,
                           employment, profits, capital, severance, production,
                           premium, payroll, stamp, unemployment insurance,
                           disability, workers' compensation, withholding, and
                           social security tax. Tax also includes all interest
                           and penalties, whether disputed or not, imposed by
                           any Government.

2.       PURCHASE AND SALE OF SHARES. At the Closing and subject to this
         Agreement, Purchaser will purchase from Shareholders, and Shareholders
         will sell to Purchaser, all of the
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         Shares. As a result of the purchase, Purchaser will become the sole
         owner of all of the Shares and Company will become a wholly owned
         subsidiary of Purchaser.

3.       CLOSING.  The Closing will take place:

         3.1      at 10:00 A.M., local time on or before July 31, 2001 (except
                  that either party may delay the closing until not later than
                  August 31, 2001 if a Hart-Scott-Rodino or other governmental
                  filing is required and cannot be completed despite its best
                  efforts, so that a closing is not possible by July 31); and

         3.2      at the offices of Steptoe & Johnson LLP, Counsel for
                  Purchaser, 201 E Washington St., Suite 1600, Phoenix, Arizona
                  85004

         or at another agreed upon time and place.

4.       PAYMENT OF PURCHASE PRICE.

         4.1      Purchase Price. Purchaser will pay the Purchase Price to
                  Shareholders at the Closing, net of the deductions authorized
                  in this Agreement. The Purchase Price is payable to each
                  Shareholder in proportion to each Shareholder's ownership of
                  Shares. The Purchase Price has three components that will be
                  paid as follows:

                  (a)      $3,800,000 payable to the Shareholders at the Closing
                           by cashier's check or wire transfer in accordance
                           with wiring instructions given to Purchaser at least
                           72 hours prior to Closing (the "Initial Payment");

                  (b)      $200,000 that Purchaser will hold for the purpose of
                           securing Shareholders' indemnity obligations under
                           Section 14 (the "Reserve"). Purchaser will retain the
                           Reserve until expiration of Shareholders' indemnity
                           obligations (including the resolution of any claims
                           that Purchaser gives Shareholders' Representative
                           notice of before expiration). Purchaser will pay to
                           Shareholders the balance of the Reserve 6 months
                           after the Closing, but only after deducting all
                           Losses resulting from valid claims for
                           indemnification and withholding a reasonable reserve
                           for any claims made under Sections 14 and 15 below.
                           For amounts held after 6 months, Purchaser will
                           promptly pay the balance to Shareholders as soon as
                           outstanding claims under Sections 14 and 15 are
                           resolved, after deducting all Losses resulting from
                           the resolved claims;

                  (c)      $500,000 contingent "earn-out" payment payable to the
                           Shareholders prorated over 3 years after the Closing
                           based upon Company meeting the net sales and gross
                           margin percentage targets shown on Exhibit 4.1(c)
                           (the "Earnout").

         4.2      Closing Adjustments and Procedure at Closing. Purchaser will
                  reduce the Purchase Price paid at Closing by the amount of the
                  following deductions:

                  (a)      [Intentionally Omitted]

                  (b)      Bank Debt. The amount of all bank debt outstanding
                           other than the bank debt listed on Exhibit 4.2(b).

                  (c)      Security Rights. The amount due each Shareholder
                           holding a Security Right will be computed as if the
                           Security Right were the number of Shares
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                  into which the Security Right is convertible and will be net
                  of the amount Shareholder would pay under the Security Right
                  to acquire common shares of Company.

         4.3      Release of Guaranties. In addition to the Purchase Price,
                  Purchaser will assume or pay off all debt listed on Exhibit
                  4.2(b). If Purchaser leaves outstanding after the Closing any
                  of the debt listed on Exhibit 4.2(b), Purchaser will promptly
                  take all reasonable steps necessary to secure a release of any
                  guarantees of such debt provided by the Shareholders or their
                  affiliates.

5.       EMPLOYMENT OF KEY EMPLOYEES AND COMPENSATION. At the Closing, Purchaser
         will enter into the following additional agreements and undertake to
         provide the following additional consideration:

         5.1      Employment of Key Employees. Purchaser will enter into an
                  Employment Agreement with the Key Employees identified on
                  Schedule 5.1 substantially in the form of Exhibits 5.1(a) and
                  5.1(b);

         5.2      Employment of other Employees and Retention Incentive Program.
                  Purchaser will employ the employees of Company identified on
                  Schedule 5.2 (the "Other Employees") but is not obligated to
                  enter into an employment agreement with any of the Other
                  Employees. As a condition to his or her continued employment,
                  Purchaser may require that each Other Employee sign and
                  deliver to Purchaser an invention agreement in the form of
                  Exhibit 5.2. Purchaser will establish an employee retention
                  incentive program (the "Program") that will, subject to
                  reasonable eligibility requirements, apply to Company
                  employees other than Shareholders. Purchaser will design the
                  Program to pay retention incentives to employees who continue
                  to work for Company or Purchaser for six months and one year
                  after the Closing. The incentives will also be payable if
                  Purchaser completely closes Company's plant before the
                  incentives would otherwise vest. Purchaser expects to pay an
                  aggregate of $200,000 to $250,000 to eligible employees under
                  the Program.

6.       REPRESENTATIONS AND WARRANTIES BY COMPANY AND SHAREHOLDERS. Company and
         Shareholders represent and warrant to Purchaser that as of the date of
         this Agreement and as of the Closing Date:

         6.1      Organization and Authority to Conduct Business.

                  (a)      Company is duly organized, validly existing and in
                           good standing under the laws of Oklahoma.

                  (b)      Company is qualified to do business and is in good
                           standing in each of the jurisdictions identified on
                           Schedule 6.1. These are all the jurisdictions in
                           which Company must be qualified or in which the lack
                           of such qualification would have a material adverse
                           effect on the financial condition of the Company.

                  (c)      Company has all requisite corporate power and
                           authority to carry on its business as now conducted,
                           to own, lease, or operate its properties and to carry
                           out the transactions contemplated by this Agreement.
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                  (d)      Each Shareholder has all requisite power and
                           authority to carry out the transactions contemplated
                           by this Agreement.

                  (e)      Company has delivered to Purchaser complete copies of
                           Company's articles of incorporation and bylaws as
                           amended;

         6.2      Authorization and Approval of Agreement. Company and each
                  Shareholder:

                  (a)      has taken, or will take before the Closing, all
                           actions; and

                  (b)      has secured, or will secure before the Closing, all
                           material Permits

                  required to authorize the execution, delivery, and
                  consummation of this Agreement and the transactions
                  contemplated by this Agreement;

         6.3      Binding Effect. This Agreement, and each document executed by
                  Company or a Shareholder in connection with this Agreement:

                  (a)      constitutes the valid, binding, and enforceable
                           obligation of Company and the Shareholders;

                  (b)      has been duly executed and delivered by Company and
                           each Shareholder; and

                  (c)      has been duly authorized by all necessary corporate
                           or other action;

         6.4      Execution, Delivery and Performance of Agreement. The
                  execution, delivery, and performance of this Agreement by
                  Company and Shareholders will not (with or without the giving
                  of notice or the passage of time) conflict with, result in a
                  default under, result in the creation of any Encumbrance
                  pursuant to, or result in the acceleration of any obligation
                  under or permit the termination of:

                  (a)      Company's articles of incorporation or bylaws; or

                  (b)      any material Contract or Law to which Company or any
                           Shareholder is a party or by which it may be bound.

         6.5      Subsidiaries. Company does not own or have any investment in
                  any other Person.

         6.6      Capitalization and Share Ownership.

                  (a)      The authorized, issued, and outstanding capital stock
                           of Company, and the record and beneficial owners of
                           such capital stock, are as set forth on Schedule 6.6.

                  (b)      Except as set forth on Schedule 6.6, there are no
                           outstanding Security Rights under which Company is or
                           may become obligated to issue, assign or transfer any
                           shares of the capital stock of Company.

                  (c)      All the Shares are validly issued and outstanding,
                           fully paid, and non-assessable and were issued in
                           compliance with all applicable securities laws.

                  (d)      Each Shareholder owns the Shares identified on
                           Schedule 6.6 of record and beneficially, free and
                           clear of all Encumbrances, rights of first refusal,
                           preemptive rights or other restrictions except as set
                           forth on Schedule 6.6.
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                  (e)      Upon delivery of the payment for the Shares at the
                           Closing, Purchaser will acquire good and valid title
                           to all the Shares free and clear of all Encumbrances,
                           rights of first refusal, preemptive rights or other
                           restrictions;

         6.7      Transactions with Affiliates.

                  (a)      Company has not, directly or indirectly,

                           -        purchased, sold, leased, or otherwise
                                    acquired from;

                           -        disposed of any property to;

                           -        obtained any services from or furnished any
                                    services to; or

                           -        otherwise dealt with

                           any Shareholder, or any Affiliate of Company or a
                           Shareholder, except as set forth on Schedule 6.7(a).

                  (b)      Company

                           -        does not owe any amount to;

                           -        is not owed any amount by; and

                           -        does not have any Contract with or
                                    commitment to

                           any shareholder, director, officer, employee,
                           consultant or Affiliate, except for Contracts for
                           current services not yet due or as set forth on
                           Schedule 6.7(b).

                  (c)      Company does not possess or use any properties or
                           assets of any Shareholder or any Affiliate of any
                           Shareholder, except as set forth on Schedule 6.7(c);

         6.8      Financial Statements. Company has delivered to Purchaser
                  copies of the following financial statements (the "Financial
                  Statements"):

                  (a)      balance sheets as of its fiscal years ending June 30,
                           2001 (the "Financial Statements Date") and June 30,
                           2000, 1999, 1998, 1997, and 1996; and

                  (b)      statements of earnings and (to the extent reasonably
                           available) sources and application of funds for the
                           periods then ended.

                  The Financial Statements

                  (1)      fairly present Company's financial condition and
                           results of operations for the periods reported;

                  (2)      are prepared in accordance with Generally Accepted
                           Accounting Principles, consistently applied ("GAAP")
                           except for exceptions noted in the Financial
                           Statements, in Schedule 6.8, or elsewhere in this
                           Agreement; and

                  (3)      in the case of year end statements, are compiled by
                           Nelson, Frazier and Sheorey, Inc., Company's
                           independent accountants.
<PAGE>   9
         6.9      Absence of Undisclosed Liabilities. As of the Financial
                  Statements Date Company had no material debts or liabilities
                  except as disclosed in the Financial Statements or this
                  Agreement or on Schedule 6.9. Since the Financial Statements
                  Date Company has not incurred additional material debts or
                  liabilities except as disclosed in Schedule 6.9 or elsewhere
                  in this Agreement;

         6.10     Litigation. Except as set forth in Schedule 6.10,

                  (a)      There is no material Proceeding pending or, to their
                           knowledge, threatened; and

                  (b)      There is no material Order in effect or, to their
                           knowledge, threatened

                  against or relating to

                  (1)      Company or Company's properties, assets, or business;

                  (2)      Company's officers, directors, or employees in their
                           capacities as such or on account of any action taken
                           or done in such capacities; or

                  (3)      the transactions contemplated by this Agreement.

                  They do not know, or have reason to know, any basis for such a
                  material Proceeding or Order;

         6.11     Bankruptcy Proceedings. Company is not involved in any
                  Proceeding by or against it

                  (a)      under the Bankruptcy Code;

                  (b)      under any other insolvency or debtors' relief act; or

                  (c)      for the appointment of a trustee, receiver,
                           liquidator, assignee, sequestrator or other similar
                           official;

         6.12     Taxes. Except as set forth in Schedule 6.12:

                  (a)      Company has paid, or will pay before their due date,
                           all material Taxes due on or before the Closing or
                           due after the Closing in respect of Company's
                           operations before the Closing;

                  (b)      Company has timely filed, or will timely file, all
                           tax returns required in connection with any material
                           Taxes, and has not made any requests for extensions.
                           All such returns are accurate and comply with
                           applicable Law;

                  (c)      Company has made all material deposits required by
                           Law.

                  (d)      Company has not been delinquent in the payment of any
                           material Tax or has paid any penalty and interest
                           associated with a delinquency; and

                  (e)      Company is not currently the subject of any Tax
                           audit, has no reassessment of any Tax proposed, and
                           knows of no basis for any such reassessment;

         6.13     Compliance with Laws, Permits, and Contracts. To the best of
                  Company's and Shareholders's knowledge, and except as set
                  forth in Schedule 6.13:
<PAGE>   10
                  (a)      Company has complied in all material respects with
                           all Laws applicable to its Business, Properties, or
                           operations as presently conducted and as conducted in
                           the past;

                  (b)      Company has secured and is in compliance with all
                           material Permits required for its Business,
                           Properties, and operations as presently conducted;

                  (c)      Company has not offered, paid, or agreed to pay money
                           or anything of value for the purpose of or with the
                           intent of obtaining or maintaining business for
                           Company, or otherwise benefiting Company, in
                           violation of any Law (including Section 30A(a) of the
                           Securities Exchange Act of 1934, as amended); and

                  (d)      The ownership and present use of Company's
                           properties, and the conduct of its business,

                           -        does not materially conflict with the rights
                                    of any other person; and

                           -        will not (with or without the giving of
                                    notice or the passage of time) conflict with
                                    or result in a default under

                                    (1)      Company's articles of incorporation
                                             or bylaws; or

                                    (2)      any material Contract or Law to
                                             which Company is a party or by
                                             which it is affected;

         6.14     Enforceability of Contracts, No Defaults. Except as set forth
                  on Schedule 6.14:

                  (a)      all Contracts identified in this Agreement to which
                           Company is a party are effective, valid, binding, and
                           enforceable in accordance with their terms; and

                  (b)      Company does not know, or have reason to know, of any
                           material default (or event which, after notice or
                           lapse of time, would constitute a material default)
                           of such Contracts;

         6.15     Product Recalls. Except as set forth on Schedule 6.15, Company
                  has not within the past 5 years:

                  (a)      been party to any Proceeding brought by a Government;
                           or

                  (b)      been subject to any Order;

                  that required, or sought to require, that Company recall any
                  products that Company designed, manufactured, assembled,
                  shipped, sold, distributed, installed, repaired or maintained.
                  Company does not know, or have reason to know, of any
                  voluntary recall undertaken to avoid a Proceeding or Order or
                  of any pending or threatened Proceeding or Order that would
                  require such a recall;

         6.16     Environmental Matters. Except as set forth on Schedule 6.16:

                  (a)      Company is in material compliance with Environmental
                           Laws;
<PAGE>   11
                  (b)      Company has secured all material Permits required
                           under Environmental Laws for the operation of the
                           Businesses (and such Permits are listed on Schedule
                           6.16);

                  (c)      Company does not know, or have reason to know, of any
                           material pending or threatened Proceedings against
                           Company with respect to Environmental Laws;

                  (d)      Company does not know, or have reason to know, of any
                           act attributable to Company that could give rise to
                           material liability under CERCLA or any other
                           Environmental Law. Company has not submitted notice
                           pursuant to Section 103 of CERCLA with respect to any
                           of the Properties;

                  (e)      To its knowledge, Company owns or operates no
                           underground storage tank except for tanks in material
                           compliance with Environmental Laws. All of Company's
                           underground storage tanks are identified on Schedule
                           6.16; and

                  (f)      Company does not know, or have reason to know, of any
                           Hazardous Materials that have been released,
                           discharged, deposited, emitted, leaked, spilled,
                           poured, emptied, injected, dumped or disposed of on,
                           in, or under the Properties by Company or any other
                           Person in a manner that materially violates any
                           applicable Environmental Law;

         6.17     Properties. Schedule 6.17 lists:

                  (a)      Real Property.

                           -        All real property Company owns, leases, or
                                    uses in its business;

                           -        the terms on which Company owns, leases, or
                                    uses such property; and

                           -        the terms of any Encumbrances affecting
                                    Company's interest in such property;

                  (b)      Personal Property.

                           -        All tangible personal property (other than
                                    inventory and supplies) Company owns, leases
                                    or uses in its business, except for owned
                                    items having a value of less than $1,000 and
                                    leased items requiring lease payments less
                                    than $1,000;

                           -        the terms on which Company owns, leases, or
                                    uses such property; and

                           -        the terms of any Encumbrances affecting
                                    Company's interest in such property;

                  (c)      Title. Company has satisfactory title to all
                           properties and assets reflected in the Financial
                           Statements or in Schedule 6.17 (the "Properties"),
                           free of any Encumbrance, except:

                           -        Properties sold or otherwise disposed of in
                                    the ordinary course of business consistent
                                    with past practice after the Financial
                                    Statements Date; or
<PAGE>   12
                           -        as set forth in Company's financial
                                    statements or in Schedule 6.17; and

                  (d)      The Properties are in good operating condition and
                           repair, are suitable for the purposes used, and are
                           adequate for the current operations of Company.
                           Together with inventory and supplies, the Properties
                           are all of the properties and tangible assets used in
                           connection with, necessary for the conduct of, or
                           otherwise material to the Business. Company does not
                           know, or have reason to know, of any pending or
                           threatened condemnation affecting the Properties;

         6.18     Insurance. Schedule 6.18 lists all material insurance policies
                  insuring, and all material performance bonds issued in favor
                  of, Company, specifying

                  (a)      the name of the insurer or bonding company;

                  (b)      the risk insured or bonded;

                  (c)      the limits of coverage;

                  (d)      the deductible (if any);

                  (e)      the premium (including any proposed premium increases
                           known to Company);

                  (f)      any notice of cancellation or nonrenewal; and

                  (g)      the date through which coverage will continue by
                           virtue of premiums already paid;

         6.19     Development and Distribution Agreements. Schedule 6.19 lists
                  all material Contracts of Company but excluding:

                           -        Contracts listed or excluded elsewhere in
                                    this Agreement; and

                           -        any Contract entered into in the ordinary
                                    course of business terminable by Company in
                                    less than 30 days or involving payment or
                                    receipt of less than $10,000

                  relating to development of Company's products, Company's
                  development of products for others, distribution of products,
                  or the services of an independent contractor;

         6.20     Other Contracts. Schedule 6.20 lists:

                  (a)      Each loan, conditional sales, or security agreement
                           of Company with an unpaid balance more than $10,000;

                  (b)      Each material license agreement relating to
                           intellectual property of Company (other than licenses
                           incident to leases of computers, software, or office
                           or photographic equipment used in the ordinary course
                           of business); and

                  (c)      All material Contracts of Company but excluding:

                           -        Contracts listed or excluded elsewhere in
                                    this Agreement; and
<PAGE>   13
                           -        any Contract entered into in the ordinary
                                    course of business terminable by Company in
                                    less than 30 days or involving payment or
                                    receipt of less than $10,000;

         6.21     Employment Matters.

                  (a)      Employment Contracts and Plans. Schedule 6.21 lists

                           -        all material Employment Contracts and
                                    Employment Plans of Company; and

                           -        the names and current annual rates of
                                    compensation of all personnel (including
                                    employees and independent contractors) whose
                                    2000 compensation was $75,000 or more;

                  (b)      Compliance with Employment Laws. Company:

                           -        is in material compliance with all Laws
                                    regulating employment practices, terms and
                                    conditions of employment and wages and
                                    hours;

                           -        is not subject to any unfair labor practice
                                    complaint or other petition before the
                                    National Labor Relations Board;

                           -        is not subject to any material labor strike,
                                    dispute, slow-down or stoppage;

                           -        is not subject to any material Proceeding
                                    arising out of or under a collective
                                    bargaining agreement; and

                           -        has not experienced any primary work
                                    stoppage or other labor difficulty involving
                                    its employees during the past three years;

                  (c)      Plan Compliance. Company has administered and
                           maintained the Employment Plans in material
                           compliance with all applicable Laws. Company does not
                           know, or have reason to know, of any prohibited
                           transaction (as defined in ERISA) relating to any
                           Employment Plan;

         6.22     No Guaranties. Company has not guaranteed the obligations or
                  liabilities of any Person;

         6.23     Intellectual Property. Schedule 6.23 lists all material
                  patents, trademarks, trade names, service marks, other trade
                  rights, copyrights, licenses, and similar intangibles (the
                  "Intellectual Property") that Company owns, uses, or has
                  registered. Except as disclosed on Schedule 6.23:

                  (a)      Company is not obligated to pay any royalty with
                           respect to Intellectual Property;

                  (b)      Company does not know, or have reason to know, of any
                           pending or threatened Proceedings alleging that
                           Company has infringed on any third party's
                           Intellectual Property (or of any basis for such a
                           Proceeding);

         6.24     Inventory. Except as disclosed on Schedule 6.24, Company's
                  inventory and related supplies are merchantable or suitable
                  for sale in the ordinary course of business;
<PAGE>   14
         6.25     Receivables. Schedule 6.25 lists all accounts receivable of
                  the Company as of the date indicated. All receivables listed,
                  and all receivables that have arisen since such date, arose
                  from transactions in the ordinary course of business. Company
                  has received no notice, and has no knowledge, that any obligor
                  of any such receivables contests or disputes the validity or
                  the amount owed;

         6.26     Records. Except as set forth in Schedule 6.26, the books of
                  account, minute books, stock certificate books, and stock
                  transfer ledgers ("Books") of Company are complete and correct
                  in all material respects. Company knows of no material
                  transactions involving the business of Company that properly
                  should have been but are not set forth in the Books;

         6.27     Official Filings Complete. Company has made all material
                  required Government filings;

         6.28     Absence of Changes or Events. Except as set forth in Schedule
                  6.28, as expressly permitted or contemplated by the terms of
                  this Agreement, or with Purchaser's written consent, since the
                  Financial Statements Date, Company has conducted business only
                  in the ordinary course and, since the Financial Statements
                  Date, has not taken, or entered into any agreement or made any
                  commitment to take, any of the following actions:

                  (a)      Incurred any obligation or liability, except
                           liabilities

                           -        for trade or business obligations incurred
                                    in the ordinary course of business; or

                           -        which do not materially affect its business
                                    or financial condition;

                  (b)      Paid any obligation or liability other than current
                           liabilities incurred in the ordinary course of
                           business;

                  (c)      Declared or paid dividends or other distributions to
                           its shareholders or purchased, retired or redeemed,
                           or obligated itself to purchase, retire or redeem,
                           any of its capital stock;

                  (d)      Purchased, retired or redeemed, or obligated itself
                           to purchase, retire or redeem, any of its capital
                           stock;

                  (e)      Issued or sold any Shares or other securities;

                  (f)      Acquired any capital stock of, interest in, or other
                           securities of any Person, or otherwise made any loan
                           or advance to or investment in any Person;

                  (g)      Subjected any Properties to any Encumbrance, except
                           in the ordinary course of business;

                  (h)      Sold or otherwise disposed of any Properties, except
                           in the ordinary course of business;

                  (i)      Cancelled, compromised, waived, or released any
                           material debt, claim, or right, except in the
                           ordinary course of business;
<PAGE>   15
                  (j)      Received or given notice of termination of any
                           Contract whose termination has had, or may have, a
                           material adverse effect on its business or financial
                           condition;

                  (k)      To its knowledge, experienced any labor union
                           organizing activity, had any actual or threatened
                           employee strikes, work stoppages, slow-downs, or
                           lock-outs, or had any material change in the terms of
                           agreements with its employees, agents, customers or
                           suppliers;

                  (l)      Made or agreed to make any change in the compensation
                           payable to any director, officer, or employee, except
                           for normal periodic bonus accruals and normal
                           periodic increases in regular compensation;

                  (m)      Acquired any capital assets that cost in excess of an
                           aggregate of $50,000;

                  (n)      Instituted, settled or agreed to settle any material
                           Proceeding; or

                  (o)      Suffered any change, event, condition, damage,
                           destruction, or loss having a material adverse affect
                           on its business or financial condition;

         6.29     Disclosure. No representation or warranty by Company in this
                  Agreement and no certificate or other instrument furnished by
                  or on behalf of Company or Shareholders to Purchaser

                  (a)      contains or will contain any untrue statement of a
                           material fact; or

                  (b)      omits or will omit to state any material fact
                           required to make the statements made in this
                           Agreement and such certificates, taken as a whole,
                           not misleading.

                  The representations and warranties contained in this Agreement
                  will not be affected or deemed waived by reason of any
                  investigation by Purchaser or its representatives.

7.       REPRESENTATIONS AND WARRANTIES BY PURCHASER. Purchaser represents and
         warrants to Seller that as of the date of this Agreement and as of the
         Closing Date:

         7.1      Organization and Authority. Purchaser is a corporation duly
                  organized, validly existing and in good standing under the
                  laws of Arizona. Purchaser has all requisite power and
                  authority to carry on its business as presently conducted, to
                  enter into this Agreement, and to carry out the transactions
                  contemplated by this Agreement;

         7.2      Authorization and Approval of Agreement. Purchaser

                  (a)      has taken all actions; and

                  (b)      has secured, or will secure before the Closing, all
                           material Permits

                  required to authorize the execution, delivery, and
                  consummation of this Agreement and the transactions
                  contemplated by this Agreement;

         7.3      Binding Effect. This Agreement, and each document executed by
                  Purchaser in connection with this Agreement, constitutes the
                  valid, binding, and enforceable obligation of Purchaser, has
                  been duly executed and delivered by Purchaser, and has been
                  duly authorized by all necessary corporate action;
<PAGE>   16
         7.4      Execution, Delivery and Performance of Agreement. The
                  execution, delivery, and performance of this Agreement by
                  Purchaser will not (with or without the giving of notice or
                  the passage of time) conflict with, result in a default under,
                  or result in the creation of any Encumbrance pursuant to:

                  (a)      Purchaser's certificate of incorporation or bylaws;
                           or

                  (b)      any material Contract or Law to which Purchaser is a
                           party or by which it may be bound;

         7.5      Investment Intent. Purchaser acknowledges that:

                  (a)      the Shares are not registered under the Securities
                           Act of 1933, as amended (the "Securities Act"); and

                  (b)      Purchaser may not resell the Shares unless they are
                           registered or exempt from registration;

                  (c)      Purchaser is acquiring the Shares for its own
                           account, for investment purposes only and not with a
                           view toward their distribution;

         7.6      Purchaser's Independent Investigation. Purchaser and its
                  representatives have independently investigated Company and
                  the Business. Purchaser acknowledges that there are no
                  representations or warranties, express or implied, about
                  Company or the Business except for the representations and
                  warranties in this Agreement and each certificate and
                  instrument furnished in connection with this Agreement.
                  Purchaser is not relying on any written or oral information
                  about Company or the Business (including financial or
                  forward-looking information) except for the representations
                  and warranties in this Agreement and each certificate and
                  instrument furnished in connection with this Agreement;

         7.7      Plant Closing. Purchaser has no definite plans to implement
                  any mass lay-off, plant closing, or other covered employment
                  loss (a "Lay-off"), as those terms are defined by the Worker
                  Adjustment and Retraining Notification Act, 229 U.S.C. Section
                  2101-2109 (the "Act"), within sixty-one (61) days of the
                  Closing Date. If it implements a Lay-off after the Closing,
                  Purchaser will comply with the Act;

         7.8      Litigation. There is no material Proceeding pending or, to its
                  knowledge, threatened; and there is no material Order in
                  effect relating to the transactions contemplated by this
                  Agreement. Purchaser does not know of any basis for such a
                  Proceeding or Order;

         7.9      Disclosure. No representation or warranty by Purchaser in this
                  Agreement

                  (a)      contains or will contain any untrue statement of a
                           material fact; or

                  (b)      omits or will omit to state any material fact
                           required to make the statements made in this
                           Agreement not misleading.

                  The representations and warranties contained in this Agreement
                  will not be affected or deemed waived by reason of any
                  investigation by Company or its representatives; and
<PAGE>   17
         7.10     Bankruptcy Proceedings. Purchaser is not involved in any
                  Proceeding by or against it

                  (a)      under the Bankruptcy Code;

                  (b)      under any other insolvency or debtors' relief act; or

                  (c)      for the appointment of a trustee, receiver,
                           liquidator, assignee, sequestrator or other similar
                           official.

8.       PRE-CLOSING COVENANTS. After the execution of this Agreement and before
         the earlier of the Closing or termination of this Agreement:

         8.1      Consents and Approvals. Purchaser and Company will cooperate

                  (a)      to obtain as expeditiously as possible all material
                           Permits necessary to carry out the transactions
                           contemplated by this Agreement; and

                  (b)      to comply with all material Laws regulating or
                           restricting the transactions contemplated by this
                           Agreement;

         8.2      Conduct of Business. Company will conduct business only in the
                  ordinary course consistent with past practice or as otherwise
                  specifically permitted by this Agreement except for change to
                  which Purchaser consents in writing. Company will maintain and
                  preserve the Properties and will use best efforts:

                  (a)      to preserve the business and organization of Company;

                  (b)      to maintain the general character of the Business and
                           conduct its business, operations, activities, and
                           practices in a reasonable manner in accordance with
                           its past practices;

                  (c)      to keep available to Purchaser the services of
                           Company's officers, employees, agents and independent
                           contractors; and

                  (d)      to preserve for the benefit of Purchaser the goodwill
                           of Company's suppliers, customers, landlords and
                           others having business relations with it;

         8.3      Consultation. Company will consult with Purchaser about
                  material changes in the conduct of Company's business and,
                  after Purchaser's due diligence review, will consider
                  establishing reserves for inventory or other items (for
                  example, for the Company's Kenwood video inventory) after
                  consultation with Purchaser. Company is not required to take
                  or fail to take any action that, in Company's reasonable
                  judgment, is likely to result in:

                  (a)      a substantial penalty;

                  (b)      a claim for damages by any third party against
                           Company;

                  (c)      losses to Company;

                  (d)      prejudice to or interference with Company's business
                           and operations; or

                  (e)      a breach by Company of any of the representations and
                           warranties made by it in this Agreement;
<PAGE>   18
         8.4      Approval of Certain Transactions; Operating Requirements.
                  Company will not, without Purchaser's prior written approval,
                  take or agree to take the following actions:

                  (a)      change its articles of incorporation or bylaws;

                  (b)      merge or consolidate (or agree to merge or
                           consolidate) with or into any Person;

                  (c)      sell or purchase any Shares or any other securities;

                  (d)      declare or pay any dividend or other distribution;

                  (e)      authorize or effect any split-up or recapitalization,
                           or make any changes in its authorized or issued
                           capital stock;

                  (f)      incur any additional debt, other than trade debt
                           incurred in the ordinary course of business;

                  (g)      increase the compensation of any officers, directors,
                           or employees, except for normal periodic bonus
                           accruals and normal periodic increases in regular
                           compensation;

                  (h)      assume or guarantee the obligations of any party
                           except for Company;

                  (i)      take any action which would breach any of its
                           representations and warranties in this Agreement;

                  (j)      sell or otherwise dispose of any of its assets except
                           in the ordinary course of business;

                  (k)      subject any Properties to an Encumbrance, other than
                           in the ordinary course of business; or

                  (l)      enter into or terminate any material Contract except
                           in the ordinary course of business and except for
                           those of the type which would not have to be listed
                           and described in Schedule 6.20 or any other schedule
                           to this Agreement;

         8.4      Material Changes. Company will give Purchaser written notice
                  of any material change known to Company in any representations
                  and warranties made by it in this Agreement;

         8.5      Share Restrictions. Company will take no action that would
                  encumber or restrict the Shares or their sale or transfer,
                  except actions to enforce rights under this Agreement;

         8.6      Hart-Scott-Rodino Filing. Company, Shareholders, and Purchaser
                  will make any filing required under the Hart-Scott-Rodino Act
                  within 5 days after this Agreement is signed. Company,
                  Shareholders, and Purchaser will cooperate to respond promptly
                  to any comments to the filing and to secure any required
                  Permits under the Hart-Scott-Rodino Act;

         8.7      Confidentiality.
<PAGE>   19
                  (a)      Agreement. Purchaser and Company have entered into
                           and remain bound by the Confidentiality Agreement
                           attached as Exhibit 8.7. Each Shareholder is bound
                           under the Confidentiality Agreement to the same
                           extent as Company. Each party will comply with its
                           obligations under the Confidentiality Agreement;

                  (b)      Press Release. Company and Shareholders acknowledge
                           that Purchaser will make a public announcement of the
                           transactions contemplated in this Agreement
                           immediately after execution of the Agreement. Such an
                           announcement, and later announcements required by
                           applicable securities laws, will not be a violation
                           of Purchaser's confidentiality obligations; and

                  (c)      Communication Plans. The parties will develop, and
                           cooperatively implement, communication plans to
                           disclose the planned acquisition and its consequences
                           to Company's employees and customers.

         8.8      Investigations. Upon reasonable notice and during regular
                  business hours, Company will give Purchaser and Purchaser's
                  attorneys, accountants and other representatives:

                  (a)      access to Company's officers, directors, employees,
                           independent contractors, counsel, and independent
                           accountants;

                  (b)      access to Company's Properties, Contracts, and Books;

                  (c)      copies of documents of Company to the extent
                           Purchaser reasonably requests; and

                  (d)      information Purchaser reasonably requests with
                           respect to the affairs of Company;

                  Information that Company supplies to Purchaser or its
                  attorneys, accountants or other representatives is subject to
                  the Confidentiality Agreement. Company does not assume
                  responsibility for the accuracy or completeness of the
                  Information except and to the extent specifically provided in
                  this Agreement. The Information, and Purchaser's
                  investigation, does not affect Purchaser's right to rely on
                  the representations and warranties made in this Agreement; and

         8.9      Shareholders' Representative.

                  (a)      Shareholders agree that David Cunningham or any
                           successor will act as Shareholders' Representative
                           (the "Shareholders' Representative") for the purpose
                           of:

                           (i)      representing Shareholders in any proceedings
                                    relating to this Agreement; and

                           (ii)     performing any other actions specifically
                                    delegated to Shareholders' Representative
                                    under the terms of this Agreement.

                           Shareholders are bound by any and all actions taken
                           by Shareholders' Representative on their behalf;
<PAGE>   20
                  (b)      Shareholders may remove Shareholders' Representative
                           only by vote of Shareholders holding more than 50% of
                           the Shares immediately before Closing, but such vote
                           is not effective unless Shareholders also vote to
                           appoint a new Shareholders' Representative. If
                           Shareholders' Representative resigns or is no longer
                           able to serve, Shareholders must vote to appoint a
                           new Shareholders' Representative within 30 days after
                           the resignation or notice of inability to serve. A
                           vote to appoint a new Shareholders' Representative is
                           effective when (1) Shareholders holding more than 50%
                           of the Shares vote to elect a new Shareholders'
                           Representative and (2) the new Shareholders'
                           Representative gives notice to Purchaser and the
                           prior Shareholders' Representative of such vote;

                  (c)      Purchaser is entitled to rely upon notices given by
                           Shareholders' Representative. Purchaser is not liable
                           for actions it takes or does not take in reliance
                           upon actions Shareholders' Representative takes or
                           does not take (including Shareholders'
                           Representative's notices to Purchaser). Until
                           Purchaser receives notice of appointment of a new
                           Shareholders' Representative, Purchaser may rely upon
                           actions taken by the prior Shareholders'
                           Representative.

         8.10     Related Party Lease. Before the Closing:

                  (a)      Purchaser will have the right to review and approve
                           the existing arrangements between Company and
                           Shareholders relating to the properties in
                           Stillwater, Oklahoma, that are used in Company's
                           operations (the "Leased Property");

                  (b)      Company and Shareholders will amend the existing
                           lease to allow Company or Purchaser to continue using
                           the Leased Property for the existing term of 5 years
                           after the Closing. The lease will be at the rental
                           rate called for in the present lease agreement.

9.       CONDITIONS TO EACH PARTY'S OBLIGATIONS. No party is obligated to close
         the transactions contemplated by this Agreement unless the following
         conditions are satisfied on or before the Closing Date:

         9.1      Consents and Approvals. All Governmental consents and
                  approvals required pursuant to Section 8.1 must have been
                  obtained; and

         9.2      Proceedings. No proceeding seeking to enjoin or prohibit, and
                  no Order enjoining or prohibiting, the consummation of the
                  transactions contemplated by this Agreement may be in effect;

10.      CONDITIONS TO PURCHASER'S OBLIGATIONS. Purchaser is not obligated to
         close the transactions contemplated by this Agreement unless the
         following conditions are satisfied (or waived by Purchaser) on or
         before the Closing Date:

         10.1     Accuracy of Representations and Warranties. The
                  representations and warranties of Company and Shareholders in
                  Section 6 of this Agreement must be true and correct, both
                  when made and on the Closing Date;
<PAGE>   21
         10.2     Performance of Obligations and Delivery of Documents. Company
                  and Shareholders must have:

                  (a)      performed all covenants, agreements, and obligations
                           required of them by this Agreement; and

                  (b)      executed and delivered to Purchaser all documents
                           required to be delivered at or prior to the Closing,
                           including this Agreement;

         10.3     Opinion of Counsel. Purchaser must have received an opinion of
                  Company's counsel, dated as of the Closing Date, substantially
                  in conformance with the form of opinion attached as Exhibit
                  10.3; and

         10.4     Certificate. Company and each Shareholder must deliver to
                  Purchaser a certificate, in the form attached as Exhibit 10.4,
                  that the conditions stated in this Section 10 have been
                  fulfilled.

11.      CONDITIONS TO COMPANY'S AND SHAREHOLDER'S OBLIGATIONS. Company and
         Shareholders are not obligated to close the transactions contemplated
         by this Agreement unless the following conditions are satisfied (or
         waived by Company and Shareholders) on or before the Closing Date:

         11.1     Accuracy of Representations and Warranties. The
                  representations and warranties of Purchaser in Section 7, of
                  this Agreement must be true and correct, both when made and on
                  the Closing Date;

         11.2     Performance of Obligations and Delivery of Documents.
                  Purchaser must have:

                  (a)      performed all covenants, agreements, and obligations
                           required of it by this Agreement; and

                  (b)      executed and delivered to Shareholders all documents
                           required to be delivered at or prior to the Closing;

         11.3     Opinion of Counsel. Shareholders must have received an opinion
                  of Purchaser's counsel, dated as of the Closing Date,
                  substantially in conformance with the form of opinion attached
                  as Schedule 11.3; and

         11.4     Certificate. Purchaser must deliver to Shareholders a
                  certificate, in the form attached as Schedule 11.4, that the
                  conditions stated in this Section 11 have been fulfilled.

12.      OBLIGATIONS AT AND AFTER CLOSING.

         12.1     Company and Shareholder Deliveries. At the Closing, Company
                  and Shareholders will deliver to Purchaser:

                  (a)      Certificates for the Shares sold to Purchaser,
                           together with stock powers duly executed to transfer
                           the Shares to Purchaser;

                  (b)      an Employment Agreement in the form of Exhibit 5.1
                           executed by each Key Employee;

                  (c)      all documents required to be delivered to Purchaser
                           under this Agreement including this Agreement and all
                           other documents identified in Section 10.
<PAGE>   22
         12.2     Purchaser Deliveries. At the Closing, Purchaser will deliver
                  to Shareholders:

                  (a)      the Initial Payment;

                  (b)      An Employment Agreement in the form of Exhibit 5.1
                           executed by Purchaser for the benefit of each Key
                           Employee; and

                  (c)      all other documents required to be delivered to
                           Shareholders under this Agreement including this
                           Agreement and all other documents identified in
                           Section 11.

         12.3     Purchase of Garage Storage Cabinet Business. Purchaser grants
                  to David Cunningham or his nominee ("GSC Buyer") an option to
                  purchase Company's Garage Sale Cabinets business (the "GSC
                  Business") on the following terms:

                  (a)      GSC Buyer may purchase the business at any time
                           during the 90 days that start on the second
                           anniversary of the Closing. GSC Buyer must give
                           Purchaser notice of the repurchase at least 30 days
                           before the date on which they wish to purchase the
                           GSC Business and are obligated to make the purchase
                           if they give notice;

                  (b)      the purchase will involve only (a) the name "Garage
                           Storage Cabinets" and other intangible property
                           rights, trademarks and tradenames used exclusively by
                           the GSC Business (b) the inventory of GSC Business
                           products as of the purchase date, and (c) customer
                           lists, web site and other proprietary information
                           related solely to the GSC Business. GSC Buyer will
                           not purchase any equipment, leases, buildings, or
                           real estate in connection with the purchase of the
                           GSC Business and Purchaser will retain all such
                           items; and

                  (c)      GSC Buyer will pay, in cash on the date of purchase
                           of the GSC Business, a total of (a) $50,000 plus (b)
                           the book value of the GSC Business net assets
                           acquired.

13.      TERMINATION.

         13.1     Rights to Terminate. A party may terminate this Agreement at
                  any time before the Closing:

                  (a)      by mutual written consent of Company, Shareholders,
                           and Purchaser;

                  (b)      by written notice to the other parties if the Closing
                           has not occurred on or before August 31, 2001; or

                  (c)      by written notice to the other parties if

                           -        a material representation or warranty of the
                                    another party was or has become inaccurate
                                    or untrue (except that, if the
                                    misrepresentation or breach is curable then
                                    this Agreement will not terminate until the
                                    responsible party has failed for 10 days
                                    after notice to cure the misrepresentation
                                    or breach); or

                           -        another party has failed to comply with or
                                    perform under this Agreement (except that,
                                    if the misrepresentation or breach is
                                    curable
<PAGE>   23
                                    then this Agreement will not terminate until
                                    the responsible party has failed for 10 days
                                    after notice to cure the misrepresentation
                                    or breach).

         13.2     Effect of Termination. If this Agreement is terminated, no
                  party will have any liability or further obligation except for
                  the Break Up Fee established in Section 13.3 below, unless the
                  termination was a result of the party's (a) breach, (b)
                  violation of its duties, obligations, representations, or
                  warranties, or (c) fraud, bad faith, or willful misconduct.
                  The Confidentiality Agreement will survive any termination and
                  govern the parties' obligations with respect to Information
                  and confidentiality.

         13.3     Break-Up Fee Payable by AI Research. If this Agreement is
                  terminated:

                  (a)      by AI Research pursuant to Section 13.1(b), or

                  (b)      by Rockford pursuant to Section 13.1(c),

                  then AI Research will pay or cause to be paid to Rockford a
                  fee equal to $150,000 in immediately available funds within
                  two business days of the termination.

         13.4     Break-Up Fee Payable by Rockford. If this Agreement is
                  terminated:

                  (a)      by Rockford pursuant to Section 13.1(b), or

                  (b)      by AI Research pursuant to Section 13.1(c),

                  then Rockford will pay or cause to be paid to AI Research a
                  fee equal to $20,000 in immediately available funds within two
                  business days of the termination.

14.      INDEMNIFICATION.

         14.1     By Purchaser. Purchaser will indemnify each Shareholder from,
                  and will pay on their behalf, all Loss (whether or not
                  resulting from third party claims) incurred as a result of any
                  untrue representation made by Purchaser, any breach of
                  warranty by Purchaser, or non-fulfillment of any of
                  Purchaser's covenants or agreements stated in this Agreement;

         14.2     By Shareholders. Each Shareholder, jointly and severally with
                  each other Shareholder, will indemnify and hold harmless
                  Purchaser and (after the Closing Date) Company from, and will
                  pay on their behalf, all Losses incurred as a result of any
                  untrue representation made by Shareholders, any breach of
                  warranty made by Shareholders, or non-fulfillment of any
                  covenant or agreement (1) of Company in this Agreement to be
                  performed at or prior to Closing or (2) Shareholders in this
                  Agreement.

                  (a)      Deductible. Except as otherwise provided in this
                           Agreement, Shareholders will have no obligation to
                           indemnify Purchaser and Company under this Section
                           14.2 unless the Losses suffered exceed $10,000 in the
                           aggregate (and then only to the extent of the
                           excess).
<PAGE>   24
                  (b)      Liability Limit. The aggregate liability of
                           Shareholders under this Section 14.2 will not exceed
                           the amount of (1) the Reserve plus (2) $400,000 in
                           addition to the Reserve plus (3) the balance owing on
                           the Earnout. The obligations of Shareholders under
                           this Section 14.2 are subject to Section 15 below.

         14.3     Procedure.

                  (a)      Notice and Assumption of Defense. Promptly after an
                           indemnified party receives notice of any potential
                           Loss, the party must give notice in writing to the
                           indemnifying party. The indemnifying party must
                           assume the defense of the Loss and the indemnified
                           party will reasonably cooperate in connection with
                           such defense.

                  (b)      Payment of Defense Costs. If the indemnified party
                           reasonably determines that separate counsel is
                           necessary (whether due to the existence of different
                           defenses, potential conflicts of interest or
                           otherwise), or if the indemnifying party does not
                           assume the defense, then the indemnified party may
                           employ separate counsel, and the indemnifying party
                           will pay such counsel's reasonable fees and
                           disbursements as incurred.

                  (c)      Settlement. An indemnifying party is not obligated to
                           reimburse the costs of a settlement unless it has
                           agreed to the settlement. An indemnifying party may
                           not settle a claim unless the indemnified party
                           consents, but if an indemnified party does not
                           consent to a settlement agreed to by the opposing
                           party and the indemnifying party, then the
                           indemnifying party's indemnification obligation will
                           not exceed (1) the amount of the agreed settlement
                           plus (2) expenses incurred before the settlement
                           could have been effected.

         14.4     Claims of Shareholders. No Shareholder will have any right to
                  seek damages, reimbursement, indemnification, contribution, or
                  similar rights from Company or any officer or employee of
                  Company for Losses for which Shareholder is liable under this
                  Section.

15.      EXPIRATION OF REPRESENTATIONS AND WARRANTIES. All representations and
         warranties made by the parties in this Agreement, or in any instrument
         or document furnished in connection with this Agreement, will survive
         the Closing and any investigation at any time by or on behalf of the
         parties as provided in this Section.

         15.1     Survival of Certain Representations and Warranties. The
                  representations and warranties set forth in Section 6 and
                  Section 7 will survive only until six months after the Closing
                  Date except to the extent that prior to that time one or more
                  claims is submitted in writing to the indemnified party and
                  identified as a claim for indemnification pursuant to this
                  Agreement;

         15.2     Limit on Claims. A party may maintain a claim or action for
                  indemnity under Section 14.2 after the expiration of the
                  representation or warranty only if the party made the claim in
                  writing before expiration.

         15.4     Exclusive Remedy. The indemnification provided by Shareholders
                  in Section 14.2 is Purchaser's exclusive remedy for breach of
                  any representation, warranty
<PAGE>   25
                  or covenant by Company or Shareholders, except that nothing in
                  this Section limits Purchaser's remedies against a Shareholder
                  in respect of fraud, intentional misrepresentations, or
                  intentional omissions engaged in personally by Shareholder.

16.      NOTICES. Notices under this Agreement must be in writing. Notices are
         deemed given:

         16.1     when personally delivered;

         16.2     when received by facsimile, e-mail, or overnight courier
                  service; or

         16.3     on the fifth business day after mailing by first class
                  registered mail, return receipt requested.

         Notices must be sent to the parties at the addresses stated on the
         signature page of this Agreement (or at any other address designated in
         a notice given by a party to change its address). Notices to a
         Shareholder under this Agreement are sufficient if given to
         Shareholders' Representative.

17.      CERTAIN COSTS.

         17.1     Costs of Proceedings. In any Proceeding arising under or
                  related to this Agreement the prevailing party is entitled, in
                  addition to other amounts it recovers, to have the other party
                  pay all costs and expenses (including reasonable attorneys'
                  fees) incurred in connection with the Proceeding.

         17.2     Expenses. Each party is solely responsible for its own
                  expenses relating to the preparation, execution, and
                  consummation of this Agreement and the transactions
                  contemplated by this Agreement, except that expenses are
                  recoverable as part of the damages owed by a party whose
                  failure to perform its obligations results in the termination
                  of this Agreement.

         17.3     Broker's Fees. Each party is solely responsible for, and
                  indemnifies the other parties against, obligations to any
                  broker, finder or intermediary retained by it.

18.      MISCELLANEOUS.

         18.1     Integration and Amendment. This Agreement, together with any
                  confidentiality agreement, constitutes the entire agreement of
                  the parties, and supersedes all prior agreements or
                  understandings among the parties with respect to their subject
                  matter. This Agreement may be amended only in a written
                  agreement signed by all of the parties (except that, for
                  amendments after the Closing, Shareholders' Representative may
                  sign amendments on behalf of all Shareholders).

         18.2     Waivers. No waiver under this Agreement is valid unless it is
                  in writing and signed by the party giving the waiver. A waiver
                  of a particular matter does not waive a subsequent or similar
                  matter.

         18.3     Binding Effect. This Agreement is binding upon, and inures to
                  the benefit of, each party and its successors and assigns.

         18.4     No Benefit to Others. This Agreement is solely for the benefit
                  of the parties (and their successors and assigns) and does not
                  confer any rights on any other persons.
<PAGE>   26
         18.5     Severability. The invalidity or unenforceability of any
                  provision of this Agreement does not affect the other
                  provisions. This Agreement is to be construed in all respects
                  as if it excluded any invalid or unenforceable provision.

         18.6     Construction and Headings. Whenever a singular word is used in
                  this Agreement it also includes the plural if required by the
                  context, and vice versa. Paragraph headings are for
                  convenience only and do not define or limit the contents of a
                  paragraph.

         18.7     Cooperation. In order to carry out this Agreement, each party
                  will cooperate, will take further action, and will execute and
                  deliver further documents as reasonably requested by any other
                  party.

         18.8     Counterparts. This Agreement may be executed in one or more
                  counterparts, all of which taken together are one original.

         18.9     Governing Law. This Agreement is governed by the internal Laws
                  of Arizona. Exclusive jurisdiction and venue for any
                  litigation arising under this Agreement is in the federal and
                  state courts located in Maricopa County, Arizona.


         [Signature Page is on the following page]
<PAGE>   27
19.      EFFECTIVE DATE. This Agreement is executed and effective as of
         ___________, ____.

                           Rockford Corporation, an Arizona corporation


                           By:
                              --------------------------------------------------
                                President

                           By:
                              --------------------------------------------------
                                Secretary

                           Address:
                                 -----------------------------------------------

                                   Telephone  (     )
                                                      --------------------
                                   Facsimile  (     )
                                                      --------------------

                           AI Research, Inc., an Oklahoma corporation


                           By:
                              --------------------------------------------------
                                President

                           By:
                              --------------------------------------------------
                                Secretary

                           Address:
                                 -----------------------------------------------

                                   Telephone  (     )
                                                      --------------------
                                   Facsimile  (     )
                                                      --------------------

The undersigned consents to appointment as Shareholders' Representative under
this Agreement, agrees to serve in such capacity at and after the Closing
(subject to removal or resignation as permitted under the Agreement), and agrees
to be bound by the terms of the Agreement.

                           ----------------------------------------
                                    [Name]

                           Address:
                                    --------------------------------------------

                                    --------------------------------------------
\
                                    --------------------------------------------

                                      Telephone  (     )
                                                         --------------------
                                      Facsimile  (     )
                                                         --------------------
<PAGE>   28
                           Shareholder's Signature Page

The Shareholder identified below joins in and agrees that it is bound by the
Stock Purchase Agreement. Shareholder authorizes Company and Purchaser to attach
this Signature Page to the Agreement.


                            Printed Name:
                                         ---------------------------------------

                             ---------------------------------------------------
                                          Individual's Signature

                                             OR


                            By:
                               -------------------------------------------------
                                  President


                            By:
                               -------------------------------------------------
                                  Secretary

                                             OR

                            Name of Attorney:
                                             -----------------------------------

                             ---------------------------------------------------
                                        Attorney in Fact's Signature
                                        (Power of Attorney Attached)

                            Address:
                                    --------------------------------------------

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

                            Attention:
                                      ------------------------------------------
                            Telephone  (     )
                                               --------------------------
                            Facsimile  (     )
                                               --------------------------
<PAGE>   29
                                 Exhibit 4.1(c)
                       Net Sales and Gross Profit Targets

      The earnout payment under Section 4.1(c) will be paid quarterly over the
first 12 quarters after the Closing, beginning with the 4th Quarter of 2001 and
ending with the 3rd Quarter of 2004. Payments will be made quarterly based on
achievement of

         (a)      quarterly business plan sales budget, and

         (b)      gross margin percentage budget

established by AI Research and approved by both Rockford and Shareholders. Each
budget will be established before the Closing

      Payments in any quarter are payable if AI Research achieves at least:

         (a)      ____% of the budgeted net sales in the quarter, and

         (b)      ____% of the budgeted gross margin percentage.

For this purpose, "gross margin percentage" means (net sales minus (standard
material costs plus purchase price variances plus inbound freight)) divided by
net sales. In computing AI Research sales, Rockford will include the following
product lines:

      -  Q-Logic

      -  Kenwood OEM

      -  Rockford-Q

      -  Lightning-Q

      -  Garage Storage Cabinets

      If AI Research achieves these targets in a quarter, then Rockford will pay
a contingent payment for the quarter based on a percentage of net sales. The
percentage will be equal to the amount necessary to pay the full $500,000
contingent earnout if AI Research achieves 100% of its quarterly sales budgets
(and the required gross margin percentage) over 12 quarters. The maximum
payment, over the full 12 quarters, is $500,000, but if AI Research exceeds its
budget goals then the earnout may be fully paid in less than 12 quarters.

      At the end of 12 quarters, if any quarterly payment was withheld because
of AI Research's failure to achieve the budgeted net sales and gross margin
percentages in the quarter, Rockford will pay the amount of the withheld payment
(up to a maximum aggregate payment of $500,000 including prior payments under
this Exhibit) if AI Research has achieved at least

         (a)      _____% of the budgeted net sales in the full 12 quarter
                  period, and

         (b)      _____% of the budgeted gross margin percentage for the full 12
                  quarter period.
<PAGE>   30
                                AI RESEARCH, INC.
                             SCHEDULES FOR AGREEMENT

                                 EXHIBIT 4.2(b)

DEBT

The Company has the following bank debt outstanding at June 30, 2001:

<TABLE>
<S>                                 <C>
Note Payable - Line of Credit       $1,555,003
Note Payable - Forklift             $        0
Note Payable - S&R                  $  366,826
</TABLE>

The above amounts for bank debt are principal amounts only. Additionally, the
Company may owe amounts for unpaid interest from the last payment date through
June 30, 2001.
<PAGE>   31
                                  SCHEDULE 5.1
                              EMPLOYMENT AGREEMENT

Attached are the Employment Agreements with the Key Employees - David Cunningham
and William Basore.
<PAGE>   32
                                 EXHIBIT 5.1(a)
                    EMPLOYMENT AGREEMENT OF DAVID CUNNINGHAM
<PAGE>   33
                              EMPLOYMENT AGREEMENT

           This Agreement is between Rockford Corporation, an Arizona
corporation, ("Rockford") and David Cunningham ("Employee"). Rockford and
Employee agree as follows:

1. RECITALS.

     1.1  Rockford's Business. Rockford's principal business is the design,
          manufacture, and sale of high-performance car audio products. Rockford
          has purchased Audio Innovations, Inc., from Employee and other former
          shareholders of Audio Innovations to expand Rockford's car audio
          business.

     1.2  Employee Experience. Employee has worked in the car audio industry and
          was an officer of Audio Innovations before Rockford bought it.

     1.3  Agreement for Employment. In connection with Rockford's purchase of
          Audio Innovations, Rockford recognizes Employee's potential
          contribution to Rockford's growth and desires to enter into an
          employment agreement with Employee.

     1.4  Agreement Purpose. This Agreement states the terms of Rockford's
          employment of Employee.

2. EMPLOYMENT. Rockford employs Employee and Employee accepts employment,
subject to the terms and conditions of this Agreement.

3. TITLE AND DUTIES.

     3.1  Title and Reporting. Employee will serve as Managing Director of Audio
          Innovations. Employee will have the responsibilities and duties
          assigned by, and will report to the person designated by Rockford's
          President and Chief Executive Officer. Employee will initially report
          to Dave Boshes, Rockford's Vice President of Operations.

     3.2  Duties. Employee's initial duties are to:

          (a)  serve as Managing Director for Audio Innovations focusing on its
               business;

          (b)  participate as a member of Rockford's management group with
               duties as assigned by Rockford's President and Chief Executive
               Officer;

          (c)  participate with other members of the Audio Innovations
               management team, as designated by Rockford's President and Chief
               Executive Officer, to:

               (1)  direct all aspects of Audio Innovations' business activities
                    and ensure the adequacy and soundness of its financial
                    structure, operations, employee relations, and short and
                    long-range growth, including the growth and operation of
                    Audio Innovations' Kenwood OEM and Garage Storage Cabinets
<PAGE>   34
                    businesses;

               (2)  establish Audio Innovations' overall objectives, policies,
                    and plans relating to its accessories business;

               (3)  develop new business; and

               (4)  develop programs to encourage successful future management.

     3.3  No Reduction of Duties; Limitation on Moves. Rockford may not change
          Employee's duties in a manner that would substantially reduce
          Employee's responsibilities for management of Audio Innovations'
          business unless Employee consents to the change. Rockford may not
          require Employee to move to a location outside the Stillwater,
          Oklahoma area unless Employee consents.

4. COMPENSATION.

     4.1  Base Compensation. Rockford will pay Employee a base salary of XXXXX*
          annually. Rockford will pay Employee using its regular payroll
          practices. Payments are subject to the normal and regular Employee's
          portion of withholding tax, workers' compensation and unemployment
          tax, and other lawful deductions in the state where Employee is
          located.

     4.2  Participation in Bonus Plan. Rockford will also pay Employee a bonus
          based on (a) Rockford's profit sharing plan as approved by the board
          of directors and (b) its evaluation of Employee's performance each
          year. Rockford's President and Chief Executive Officer will recommend,
          and its compensation committee and board of directors will approve,
          Employee's bonus annually, at their discretion. Bonuses are paid based
          on Rockford's performance (including net income before taxes, net
          operating income, net cash flow, return on equity, increase in
          shareholder equity, and corporate transactions). Employee's target
          bonus is a XXXXX* but Employee acknowledges that bonuses are
          discretionary, may vary in amount from the target, and may not be paid
          depending upon the decisions of Rockford's compensation committee and
          board of directors.

     4.3  Changes of Compensation. After the first year of the Agreement,
          Rockford and Employee will meet and adjust Employee's compensation to
          take account of changes in the cost of living and of Employee's duties
          for and performance at Rockford. Rockford's may increase Employee's
          compensation in excess of the cost of living, at its discretion.


         *Confidential information redacted and filed separately with the
          Commission.
<PAGE>   35
5. TERM AND TERMINATION.

     5.1  Term. The Agreement is for a term commencing on the effective date of
          Rockford's purchase of Audio Innovations and expiring three years
          thereafter.

     5.2  Termination. Either party may terminate this Agreement (a) for any
          reason at any time by giving 30 days written notice of termination or
          (b) for cause by giving written notice of termination. Termination
          will not affect the obligations of Employee and Rockford which survive
          termination. In this Agreement, "Cause" for termination means:

          (a)  Employee's indictment, conviction or plea of guilty to any act or
               acts constituting a felony under the laws of the United States,
               any state or any foreign jurisdiction,

          (b)  Employee's failing or refusing, after a 30-day written notice
               from Rockford and an opportunity for Employee to cure, to comply
               in a material respect with Rockford's policies, written or
               otherwise, or with the material duties and obligations imposed
               under this Agreement,

          (c)  any act by Employee that is unlawful or brings Rockford into
               disrepute unless Employee believed in good faith that the act was
               lawful and not opposed to Rockford's best interests, or

          (d)  any act by Employee involving theft or dishonesty involving
               $1,000 or more of Rockford's property

     5.3  Continuation of Base Compensation and Medical Insurance. If

          (a)  Rockford terminates this Agreement for cause,

          (b)  Employee terminates this Agreement, or

          (c)  Employee dies or becomes permanently disabled

               then Rockford is not required to pay Employee after the
               termination of the Agreement. If this Agreement is terminated for
               any other reason, then Rockford will continue (1) to pay Employee
               his base compensation under section 4.1 for the remaining term of
               this Agreement and (2) to provide medical insurance comparable to
               that provided on the termination date for 6 months after the
               termination of this Agreement.
<PAGE>   36
6. BENEFITS AND POLICIES.

     6.1  Benefit Plans. In addition to the compensation described above,
          Employee may participate in all fringe benefit plans made available to
          Rockford employees located at Audio Innovations' location. To the
          extent permitted by law and the applicable benefit plans, Employee
          will be credited with time of service based on continuous periods of
          employment for either Rockford or Audio Innovations (Employee
          acknowledges that tax law and the terms of benefit plans may restrict
          Rockford's right to apply this rule in the case of Rockford's 401 (k)
          plan and other tax advantaged benefit plans. Rockford will use its
          best efforts to credit Employee with time of service on this basis to
          the extent permitted by the rules governing such plans).

     6.2  Leave. Employee may take reasonable vacation, holiday, and sick leave,
          subject to Rockford's reasonable limits and procedures as applied to
          all Rockford employees. For purposes of computing the amount of leave
          available to Employee, Employee will be credited with time of service
          based on all prior periods of employment for either Rockford or Audio
          Innovations. Employee must adjust his vacation and holiday schedule as
          necessary to satisfy Rockford's reasonable business needs.

     6.3  Expenses. Rockford will reimburse Employee for reasonable expenses
          incurred in connection with Employee's employment, on a basis
          consistent with Rockford's reimbursement of other employees and
          subject to Rockford's right to approve all expenses in advance.
          Rockford may adopt reasonable policies for reimbursement of expenses,
          may require receipts or other appropriate evidence of each expense,
          and may review the reasonableness of each expense.

     6.4  Employee Manual. All other terms of Employee's employment will be
          governed by Rockford's employee manual. Rockford reserves the right
          unilaterally to amend the employee manual, from time to time, and
          Employee will be subject to changes made so long as they are applied
          to all employees.

     6.5  Stock Options. Employee will participate in Rockford's 1997 and 1994
          Stock option plans on the same basis as other Rockford management
          employees. Rockford's Compensation Committee will determine the amount
          and terms of options awarded to Employee. All options are subject to
          the terms of the plans.

     6.6  No Car. Employee acknowledges that Rockford policy is not to provide a
          company car to any employee. At Closing, Rockford will pay Employee a
          one-time allowance of XXXXX* in connection with the termination of car
          arrangements provided by Audio Innovations.


         *Confidential material redacted and filed separately with the
          Commission.
<PAGE>   37
7. NON-COMPETITION. During:

     (a)  the term of this Agreement and for one year after this Agreement
          terminates or expires; and

     (b)  any period after the term when Employee is receiving payments of base
          compensation (but Employee may elect to terminate payments of base
          compensation to terminate this period)

     Employee will not engage in, plan for, organize, work for, or assist,
     directly or indirectly, any business that manufactures or distributes car
     audio products in North America (excluding businesses that sell car audio
     products only at retail).

8.  CONFIDENTIAL INFORMATION. During and after the term of Employee's
    employment, Employee will keep confidential, and will not reproduce, copy or
    disclose to any other person or firm, all trade secrets and other
    proprietary or confidential information and data concerning Rockford, Audio
    Innovations, or their business ("Confidential Information"). Employee will
    not, during or after the term of this Agreement, use (either alone or with
    others), disclose to any person, or encourage anyone else to disclose any
    Confidential Information except within the scope of Employee's duties and
    responsibilities for Rockford and Audio Innovations or with Rockford's
    consent.

9.  RETURN OF ROCKFORD DOCUMENTS. Upon termination of this Agreement, Employee
    will return to Rockford all records and documents of or pertaining to
    Rockford or Audio Innovations (including, but not limited to, customer
    lists, names, or addresses). Employee will not make, retain, or give to any
    other person any copy or extract of any such record or document. "Record"
    includes but is not limited to, information stored on computer.

10. NON SOLICITATION. During and after the term of this Agreement, Employee will
    not solicit, or assist others to solicit, any persons who were, at any time
    during the term of Employee's employment, employed by, customers of, or
    solicited to become customers of Rockford or Audio Innovations.

11. ACTIONS. Employee acknowledges that it would be difficult to determine
    damages, and Rockford will not have an adequate remedy at law, if Employee
    breaches this Agreement. Accordingly, if Employee breaches this Agreement,
    Rockford may seek injunctive relief to enforce this Agreement. Nothing in
    this section limits or excludes any and all other rights, including rights
    to money damages, granted to Rockford in law or equity.

12. Reformation and Severability. If a section of this Agreement is deemed
    unreasonable as to time or scope by any court or arbitrator, then such court
    or arbitrator may modify the section so that it is reasonable and must then
    enforce the section as modified. If a section of this Agreement is deemed
    unreasonable by a court or arbitrator and cannot be modified so that it is
    reasonable, such section is severable from the remainder of this Agreement,
    which must be enforced according to its terms.
<PAGE>   38
13. Non-delegability of Employee's Rights. The obligations, rights and benefits
    of Employee under this Agreement are personal and may not be delegated,
    assigned, or transferred without written consent from Rockford.

14. Assignment by Rockford. Rockford may assign its rights under this Agreement
    to another business that (1) is controlled by or affiliated with Rockford or
    (2) acquires Rockford or the assets of Rockford used in connection with
    Employee's employment. After any such assignment all references in this
    Agreement to "Rockford" will, where appropriate, be deemed to refer to the
    assignee.

15. Notices. Notices under this Agreement must be in writing and are effective
    upon delivery or three days after mailing, certified or registered mail,
    return receipt requested, to the party's addresses stated on the signature
    page of this Agreement. A party may change its address by giving the other
    party notice of the change.

16. ENTIRE AGREEMENT AND AMENDMENT. This Agreement is the entire agreement of
    the parties with respect to Employee's employment and may be amended only by
    a written document signed by both parties.

20. Governing Law. Arizona law will govern this Agreement.

21. 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.

22. ARBITRATION. If the parties cannot resolve a dispute arising out of this
    Agreement or out of Employee's employment, they will submit it to binding
    arbitration in metropolitan Phoenix, Arizona. The arbitration will be before
    a single arbitrator, or, if the parties cannot agree upon a single
    arbitrator, before a panel of three arbitrators, one selected by each party
    (within 10 days after notice of a dispute and failure to agree upon a single
    arbitrator) and a third appointed by the arbitrators selected by the
    parties. The rules for commercial arbitration of the American Arbitration
    Association, as amended to the date of the proceedings, will govern
    selection of arbitrators and all arbitration proceedings. Any court having
    jurisdiction may enter judgment upon the award. The arbitrators must render
    a decision within 30 days after their appointment and may award the costs of
    arbitration as they see fit.

23. Execution and Effective Date. This Agreement is executed on ________, and is
    effective as of ,


                                  "Rockford"

                                 Rockford Corporation, an Arizona corporation

                                 By
                                       President
<PAGE>   39
                                 Address:

                                 "EMPLOYEE"

                                       David Cunningham

                                 Address:
<PAGE>   40
                                 EXHIBIT 5.1(b)
                     EMPLOYMENT AGREEMENT OF WILLIAM BASORE
<PAGE>   41
                              EMPLOYMENT AGREEMENT

           This Agreement is between Rockford Corporation, an Arizona
corporation, ("Rockford") and William Basore ("Employee"). Rockford and Employee
agree as follows:

1.   RECITALS.

     1.1  Rockford's Business. Rockford's principal business is the design,
          manufacture, and sale of high-performance car audio products. Rockford
          has purchased AI Research, Inc., from Employee and other former
          shareholders of AI Research to expand Rockford's car audio business.

     1.2  Employee Experience. Employee has worked in the car audio industry and
          was an officer of AI Research before Rockford bought it.

     1.3  Agreement for Employment. In connection with Rockford's purchase of AI
          Research, Rockford recognizes Employee's potential contribution to
          Rockford's growth and desires to enter into an employment agreement
          with Employee.

     1.4  Agreement Purpose. This Agreement states the terms of Rockford's
          employment of Employee.

2.   EMPLOYMENT. Rockford employs Employee and Employee accepts employment,
     subject to the terms and conditions of this Agreement.

3.   TITLE AND DUTIES.

     3.1  Title and Reporting. Employee will serve as National Accounts Manager
          for Rockford. Employee will have the responsibilities and duties
          assigned by, and will report to the person designated by Rockford's
          President and Chief Executive Officer. Employee will initially report
          to Dan McLeod, Rockford's Vice President of Sales.

     3.2  Duties. Employee's initial duties are to:

          (a)  serve as National Accounts Manager for Rockford focusing on
               national accounts for its Rockford Fosgate, Lightning Audio, and
               Q-Logic brands. National accounts include Best Buy, Circuit City,
               Crutchfield and possible OEM accounts; and

          (b)  participate as a member of Rockford's management group with
               duties as assigned by Rockford's President and Chief Executive
               Officer.

     3.3  No Reduction of Duties; Limitation on Moves. Rockford may not change
          Employee's duties in a manner that would substantially reduce
          Employee's responsibilities for management of Rockford's business
          unless Employee consents to the change. Rockford
<PAGE>   42
          may not require Employee to move to a location outside the
          metropolitan Phoenix, Arizona area unless Employee consents.

     3.4  Patent. Upon execution of this Agreement, Employee will transfer to
          Rockford all rights and interest in the box ring invention, including
          the patent and patent application that is currently pending. Employee
          acknowledges that Rockford will not make any royalty or other payments
          related to this invention. Rockford will reimburse Employee for the
          actual filing costs Employee has incurred in connection with filing of
          the patent application upon presentation of reasonable evidence of the
          amount of such filing costs.

4.   COMPENSATION.

     4.1  Base Compensation. Rockford will pay Employee a base salary of (a)
          $xxxxx* annually from the date of this Agreement through January 31,
          2002 and (b) $xxxxx* annually beginning on February 1, 2002. Rockford
          will pay Employee using its regular payroll practices. Payments are
          subject to the normal and regular Employee's portion of withholding
          tax, workers' compensation and unemployment tax, and other lawful
          deductions in the state where Employee is located.

     4.2  Commission. Beginning on February 1, 2002, Rockford will pay Employee
          commissions at a rate equal to a percentage of net sales to National
          Accounts for which Employee is responsible. Rockford will establish
          the commission percentage so that the target annual commission paid to
          Employee, assuming Employee achieves reasonable sales goals, is
          $xxxxx*. Rockford will make commission payments on the following
          basis:

          (a)  Computation. Commissions are based on net invoice price, defined
               as the lowest price at which the invoice may be discharged
               through payment on the day after its presentation. Net invoice
               price is exclusive of shipping or mailing costs, taxes,
               insurance, discounts, allowances, and credits, including but not
               limited to discounts and allowances from promotions, cooperative
               advertising accruals, rebates, and cash discounts;

          (b)  Accrual and Payment. Commissions are accrued when an order is
               shipped and are payable in accordance with Rockford's regular
               commission payment practices for all employees who earn sales
               commissions;

          (c)  Returns. The net invoice price of products returned, and of
               products sold but not paid for within 90 days after Rockford's
               invoice is presented, will be subtracted in computing the net
               sales; and

          (d)  Exclusions and Exceptions. Sales to employees and sales of repair
               parts do not earn commissions. Accommodation sales to sales
               representatives, distributors, or dealers (or their employees)
               and "demo" sales also do not earn commissions.

     4.3  Participation in Bonus Plan. Rockford will also pay Employee a bonus
          based on (a)

     * Confidential information redacted and filed separately with the
       Commission.
<PAGE>   43
          Rockford's bonus plan as approved by the board of directors and (b)
          its evaluation of Employee's performance each year. Rockford's
          President and Chief Executive Officer will recommend, and its
          compensation committee and board of directors will approve, Employee's
          bonus annually, at their discretion. Bonuses are paid based on
          Rockford's performance (including net income before taxes, net
          operating income, net cash flow, return on equity, increase in
          shareholder equity, and corporate transactions). Employee's target
          bonus is $xxxxx*, but Employee acknowledges that bonuses are
          discretionary, may vary in amount from the target, and may not be paid
          depending upon the decisions of Rockford's compensation committee and
          board of directors.

     4.4  Changes of Compensation. After the first year of the Agreement,
          Rockford and Employee will meet and adjust Employee's compensation to
          take account of changes in the cost of living and of Employee's duties
          for and performance at Rockford. Rockford's may increase Employee's
          compensation in excess of the cost of living, at its discretion.

5.   TERM AND TERMINATION.

     5.1  Term. The Agreement is for a term commencing on the effective date of
          Rockford's purchase of AI Research and expiring three years
          thereafter.

     5.2  Termination. Either party may terminate this Agreement (a) for any
          reason at any time by giving 30 days written notice of termination or
          (b) for cause by giving written notice of termination. Termination
          will not affect the obligations of Employee and Rockford which survive
          termination. In this Agreement, "Cause" for termination means:

          (a)  Employee's indictment, conviction or plea of guilty to any act or
               acts constituting a felony under the laws of the United States,
               any state or any foreign jurisdiction,

          (b)  Employee's failing or refusing, after a 30-day written notice
               from Rockford and an opportunity for Employee to cure, to comply
               in a material respect with Rockford's policies, written or
               otherwise, or with the material duties and obligations imposed
               under this Agreement,

          (c)  any act by Employee that is unlawful or brings Rockford into
               disrepute unless Employee believed in good faith that the act was
               lawful and not opposed to Rockford's best interests, or

          (d)  any act by Employee involving theft or dishonesty involving
               $1,000 or more of Rockford's property

     5.3  Continuation of Base Compensation and Medical Insurance. If

          (a)  Rockford terminates this Agreement for cause,

          (b)  Employee terminates this Agreement, or


     * Confidential information redacted and filed separately with the
       Commission.

<PAGE>   44
          (c)  Employee dies or becomes permanently disabled

          then Rockford is not required to pay Employee after the termination of
          the Agreement. If this Agreement is terminated for any other reason,
          then Rockford will continue(1) to pay Employee his base compensation
          under section 4.1 for the remaining term of this Agreement and (2) to
          provide medical insurance comparable to that provided on the
          termination date for 6 months after the termination of this Agreement.

6.   BENEFITS AND POLICIES.

     6.1  Benefit Plans. In addition to the compensation described above,
          Employee may participate in all fringe benefit plans made available to
          Rockford employees located at Rockford's Tempe, Arizona location. To
          the extent permitted by law and the applicable benefit plans, Employee
          will be credited with time of service based on continuous periods of
          employment for either Rockford or AI Research (Employee acknowledges
          that tax law and the terms of benefit plans may restrict Rockford's
          right to apply this rule in the case of Rockford's 401(k) plan and
          other tax advantaged benefit plans. Rockford will use its best efforts
          to credit Employee with time of service on this basis to the extent
          permitted by the rules governing such plans).

     6.2  Leave. Employee may take reasonable vacation, holiday, and sick leave,
          subject to Rockford's reasonable limits and procedures as applied to
          all Rockford employees. Employee will earn vacation leave at a rate of
          4 weeks per year. For purposes of computing the amount of leave
          available to Employee, Employee will be credited with time of service
          based on all prior periods of employment for either Rockford or AI
          Research. Employee must adjust his vacation and holiday schedule as
          necessary to satisfy Rockford's reasonable business needs.

     6.3  Expenses. Rockford will reimburse Employee for reasonable expenses
          incurred in connection with Employee's employment, on a basis
          consistent with Rockford's reimbursement of other employees and
          subject to Rockford's right to approve all expenses in advance.
          Rockford may adopt reasonable policies for reimbursement of expenses,
          may require receipts or other appropriate evidence of each expense,
          and may review the reasonableness of each expense.

     6.4  Moving Expenses. Rockford will reimburse, or pay on Employee's behalf,
          reasonable costs associated with moving Employee's household and other
          personal goods from Employee's current residence in Stillwater,
          Oklahoma, to Tempe, Arizona. Employee will cooperate with Rockford to
          select a moving company acceptable to Rockford to carry out the move.
          Rockford will also provide reasonable temporary housing for up to 90
          days at Employee's new location.
<PAGE>   45
     6.5  Employee Policies and Procedures. All other terms of Employee's
          employment will be governed by Rockford's employee policies and
          procedures. Rockford reserves the right unilaterally to amend the
          policies and procedures, from time to time, and Employee will be
          subject to changes made so long as they are applied to all employees.

     6.6  Stock Options. Employee will participate in Rockford's 1997 and 1994
          stock option plans on the same basis as other Rockford management
          employees. Rockford's Compensation Committee will determine the amount
          and terms of options awarded to Employee. All options are subject to
          the terms of the plans.

7.   NON-COMPETITION. During:

     (a)  the term of this Agreement and for one year after this Agreement
          terminates or expires; and

     (b)  any period after the term when Employee is receiving payments of base
          compensation (but Employee may elect to terminate payments of base
          compensation to terminate this period)

     Employee will not engage in, plan for, organize, work for, or assist,
     directly or indirectly, any business that sells, manufactures or
     distributes car audio products in North America (excluding businesses that
     sell car audio products only at retail).

8.   CONFIDENTIAL INFORMATION. During and after the term of Employee's
     employment, Employee will keep confidential, and will not reproduce, copy
     or disclose to any other person or firm, all trade secrets and other
     proprietary or confidential information and data concerning Rockford, AI
     Research, or their business ("Confidential Information"). Employee will
     not, during or after the term of this Agreement, use (either alone or with
     others), disclose to any person, or encourage anyone else to disclose any
     Confidential Information except within the scope of Employee's duties and
     responsibilities for Rockford and AI Research or with Rockford's consent.

9.    RETURN OF ROCKFORD DOCUMENTS. Upon termination of this Agreement, Employee
      will return to Rockford all records and documents of or pertaining to
      Rockford or AI Research (including, but not limited to, customer lists,
      names, or addresses). Employee will not make, retain, or give to any other
      person any copy or extract of any such record or document. "Record"
      includes but is not limited to, information stored on computer.

10.   NON SOLICITATION. During and after the term of this Agreement, Employee
      will not solicit, or assist others to solicit, any persons who were, at
      any time during the term of Employee's employment, employed by, customers
      of, or solicited to become customers of Rockford or AI Research.

11.   ACTIONS. Employee acknowledges that it would be difficult to determine
      damages, and Rockford will not have an adequate remedy at law, if Employee
      breaches this Agreement. Accordingly, if Employee breaches this Agreement,
      Rockford may seek injunctive relief to
<PAGE>   46
     enforce this Agreement. Nothing in this section limits or excludes any and
     all other rights, including rights to money damages, granted to Rockford in
     law or equity.

12.  REFORMATION AND SEVERABILITY. If a section of this Agreement is deemed
     unreasonable as to time or scope by any court or arbitrator, then such
     court or arbitrator may modify the section so that it is reasonable and
     must then enforce the section as modified. If a section of this Agreement
     is deemed unreasonable by a court or arbitrator and cannot be modified so
     that it is reasonable, such section is severable from the remainder of this
     Agreement, which must be enforced according to its terms.

13.  NON-DELEGABILITY OF EMPLOYEE'S RIGHTS. The obligations, rights and benefits
     of Employee under this Agreement are personal and may not be delegated,
     assigned, or transferred without written consent from Rockford.

14.  ASSIGNMENT BY ROCKFORD. Rockford may assign its rights under this Agreement
     to another business that (1) is controlled by or affiliated with Rockford
     or (2) acquires Rockford or the assets of Rockford used in connection with
     Employee's employment. After any such assignment all references in this
     Agreement to "Rockford" will, where appropriate, be deemed to refer to the
     assignee.

15.  NOTICES. Notices under this Agreement must be in writing and are effective
     upon delivery or three days after mailing, certified or registered mail,
     return receipt requested, to the party's addresses stated on the signature
     page of this Agreement. A party may change its address by giving the other
     party notice of the change.

16.  ENTIRE AGREEMENT AND AMENDMENT. This Agreement is the entire agreement of
     the parties with respect to Employee's employment and may be amended only
     by a written document signed by both parties.

20.  GOVERNING LAW. Arizona law will govern this Agreement.

21.  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.

22.  ARBITRATION. If the parties cannot resolve a dispute arising out of this
     Agreement or out of Employee's employment, they will submit it to binding
     arbitration in metropolitan Phoenix, Arizona. The arbitration will be
     before a single arbitrator, or, if the parties cannot agree upon a single
     arbitrator, before a panel of three arbitrators, one selected by each party
     (within 10 days after notice of a dispute and failure to agree upon a
     single arbitrator) and a third appointed by the arbitrators selected by the
     parties. The rules for commercial arbitration of the American Arbitration
     Association, as amended to the date of the proceedings, will govern
     selection of arbitrators and all arbitration proceedings. Any court having
     jurisdiction may enter judgment upon the award. The arbitrators must render
     a decision within 30 days after their appointment and may award the costs
     of arbitration as they see fit.
<PAGE>   47
23.  EXECUTION AND EFFECTIVE DATE. This Agreement is executed on , _____ and is
     effective as of ___________, ______.

                                 "Rockford"

                                 Rockford Corporation, an Arizona corporation



                                 By
                                    --------------------------------------------
                                       President

                                 Address:
                                                  ----------------------

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

                                 "EMPLOYEE"



                                    --------------------------------------------
                                       William Basore

                                 Address:
                                                  ----------------------

                                                  ----------------------
<PAGE>   48
                                  SCHEDULE 5.2
                                    EMPLOYEES

Attached is a listing of all employees of the Company as of the date of the
Stock Purchase Agreement.
<PAGE>   49


                               EMPLOYEE AGREEMENT

In exchange for being employed (both past and future) by Wolf Corporation, its
subsidiaries, affiliates, or successors ("Wolf"), I agree that while working for
Wolf:

1.    I have and will continue to perform my assigned duties, comply with all
      Wolf instructions and regulations, and devote my best efforts to Wolf's
      interests. I will not, without Wolf's prior written consent, engage in any
      other job or activity detrimental to Wolf's interests.

2.    I have and will continue to promptly disclose and do hereby assign to Wolf
      my entire rights in all designs, trademarks, copyrights, discoveries,
      formulae, processes, manufacturing techniques, trade secrets, inventions,
      improvements, ideas or copyrightable works:

      (a)   related in any way to my work at Wolf (whether or not during normal
            working hours);

      (b)   related in any way to Wolf's business or to Wolf's actual or
            demonstrably anticipated research or development; or

      (c)   aided by the use of Wolf equipment, supplies, facilities or trade
            secret information.

      This disclosure and assignment is and will be made without additional
      compensation and solely in consideration of the compensation paid for my
      usual work. I am not conveying rights in designs, trademarks, copyrights,
      discoveries, formulae, processes, manufacturing techniques, trade secrets,
      inventions, improvements, ideas or copyrightable works I made prior to
      working for Wolf which are identified in an attached sheet (which contains
      no confidential information). I understand that I am not required to
      assign any design, trademark, copyright, discovery, formula, process,
      manufacturing technique, trade secret, invention, improvement, idea or
      copyrightable work where:

      (1)   no Wolf equipment, supplies, facilities or trade secret information
            were used;

      (2)   the invention was developed entirely on my own time;

      (3)   the invention does not relate to Wolf's business or to Wolf's actual
            or demonstrably anticipated research or development; and

      (4)   the invention does not result from my Wolf work.

3.    I will during and after my Wolf employment, do whatever is requested by
      Wolf, at its expense to sign documents or otherwise assist in obtaining
      and enforcing Wolf's rights throughout the world in the assigned items.

4.    I have and will continue to hold in confidence and not use or disclose
      without Wolf's written authorization any confidential information
      (technical or otherwise) I obtain or create during the period of my
      employment. Confidential information includes all information that
      pertains to any aspect of Wolf's business and is either:

      (a)   unknown to actual or potential competitors of Wolf; or

      (b)   proprietary information of Wolf, its customers or suppliers.

      I will hold this information in confidence until it becomes generally
      known (other than through breaches of this agreement or other similar
      agreements). I will not make unauthorized copies of such information and
      will return to Wolf upon my termination or upon Wolf's request, all
      tangible forms of such information including drawings, computerized data
      or programs, specifications, documents, devices, models or any other
      material.
<PAGE>   50
5.    I represent that I have not brought and will not bring or use in the
      performance of my duties at Wolf any proprietary or confidential
      information (whether or not in writing) of a former employer without that
      employer's written authorization.

6.    This agreement (a) survives my employment by Wolf, (b) does not in any way
      restrict my right or the right of Wolf to terminate my employment, (c)
      inures to the benefit of successors and assigns to Wolf, and (d) is
      binding upon my heirs and legal representatives.

7.    I certify that to the best of my information and belief, I am not a party
      to any other agreement which will interfere with my full compliance with
      this Agreement except as specifically identified below.

8.    I certify and acknowledge that I have carefully read all of the provisions
      of this Agreement and that I understand and will fully and faithfully
      comply with such provisions.

The effective date of this Agreement is the date my employment began at Wolf.

Wolf                                    EMPLOYEE


By                                          By
   ---------------------------------          ---------------------------
   Director of Human Resources

                                            Printed Name
                                                        ------------------------


                                     - 2 -

<PAGE>   51
                                   EXHIBIT 5.2
                               INVENTION AGREEMENT

Attached is the standard Purchaser Invention Agreement to be signed by all
employees of the Company.
<PAGE>   52
                                  SCHEDULE 6.1
                         LEGAL JURISDICTIONS OF COMPANY

The Company is qualified to do business and is in good standing in each of the
following jurisdictions:

State of Oklahoma
<PAGE>   53
                                  SCHEDULE 6.6
              RECORD AND BENEFICIAL OWNERS OF COMPANY COMMON STOCK

The following persons are the record and beneficial owners of Company stock at
the date of the Stock Purchase Agreement:

David Cunningham                    250 shares of common stock
Yvonne Cunningham                   250 shares of common stock
William Basore                       50 shares of common stock

There are no Encumbrances, rights of first refusal, preemptive rights or other
restrictions on the shares listed above.

The Shareholders and Purchaser have agreed that David and/or Yvonne Cunningham
may, prior to the Closing Date, purchase the Company shares owned by William
Basore. If this occurs, David and/or Yvonne Cunningham will tender all of the
Company shares to Purchaser at the Closing.
<PAGE>   54
                                 SCHEDULE 6.7(a)
                          TRANSACTIONS WITH AFFILIATES

The Company leases its office, manufacturing, storage and parking space from the
Shareholders. The leases are described further in Schedule 6.17. The
Shareholders are also employees of the Company and receive wages for the
services provided. The Company provides (at no cost to employees) leased
vehicles to David Cunningham, Yvonne Cunningham and Mike Mitchell.
<PAGE>   55
                                 SCHEDULE 6.7(b)

RELATED PARTY BALANCES

The Company has the following related party balances at the date of the Stock
Purchase Agreement:

The Company has advances receivable from employees totaling $22,232 at June 30,
2001.

A/R - Southern Plains $14,818 Southern Plains was a company owned by Don
Mitchell, an employee of the Company. This account receivable is probably
uncollectible.

The Company leases its office, manufacturing, storage and parking space from the
Shareholders.

The Company provides leased automobiles to David Cunningham, Yvonne Cunningham
and Michael Mitchell. The leases are included in Schedule ___.

The Company has accrued but not paid salaries for the period June 16, 2001-June
30, 2001 and matching 401k plan contributions for David Cunningham, Yvonne
Cunningham, William Basore and Michael Mitchell (and other employees).

The Company owes various amounts to financial and legal consultants for services
provided prior to the date of the Stock Purchase Agreement.

The Company has accrued amounts for vacation pay, payroll and related payroll
taxes and withholdings for employees and shareholders as of the date of the
Stock Purchase Agreement.

The accrual for vacation pay has not been reviewed since December 31, 2000 and
may need to be adjusted as of June 30, 2001.

David Cunningham and Yvonne Cunningham have personally guaranteed the line of
credit with Stillwater National Bank. Purchaser will cancel the personal
guarantees by David Cunningham and Yvonne Cunningham of any Company obligations
as of the Closing Date.

The Company provides (at no cost to employees) leased vehicles to David
Cunningham, Yvonne Cunningham and Mike Mitchell.
<PAGE>   56
                                 SCHEDULE 6.7(c)
                               SHAREHOLDER ASSETS

The Company leases its office, manufacturing, storage and parking space from the
Shareholders. The leases are described further in Schedule 6.17. The
Shareholders are also employees of the Company and receive wages for the
services provided.
<PAGE>   57
                                  SCHEDULE 6.8
                                 GAAP EXCEPTIONS

The Company's Financial Statements are not prepared in accordance with GAAP due
to the following items:

The Financial Statements are prepared on the accounting basis used by the
Company for income tax purposes, which is a comprehensive basis of accounting
other than GAAP. Adjustments may be necessary for the following items, if the
amounts were deemed to be material.

The omission of footnotes to the financial statements.

The omission of a Statement of Cash Flows, except for the June 30, 2001
Financial Statements.

Depreciation is calculated on an accelerated MACRS method used for income tax
purposes rather than in accordance with a GAAP method.

Advance payments from customers are recorded as income as received, in
accordance with income tax requirements.

No warranty reserve is recorded.

No reserve for product returns is recorded.

No allowance for possible bad debts or uncollectible accounts receivable is
recorded.

No adjustment is made to record inventory at lower of cost or market value.
<PAGE>   58
                                  SCHEDULE 6.9
                             UNDISCLOSED LIABILITIES

The Company has the following unrecorded liabilities as of the date of the Stock
Purchase Agreement:

The cost of providing products for advance payments received under the Q-Forms
Program. Product warranty reserves. Reserves for possible product returns.
<PAGE>   59
                                  SCHEDULE 6.10
                                   LITIGATION

None.
<PAGE>   60
                                  SCHEDULE 6.12
                                      TAXES

The Company has not paid its Franchise Taxes or Property Taxes for 2001. These
taxes are due after the date of the Stock Purchase Agreement.
<PAGE>   61
                                  SCHEDULE 6.13
                   COMPLIANCE WITH LAWS, PERMITS AND CONTRACTS

None.
<PAGE>   62
                                  SCHEDULE 6.14
                    ENFORCEABILITY OF CONTRACTS, NO DEFAULTS

None.
<PAGE>   63
                                  SCHEDULE 6.15
                                 PRODUCT RECALLS

 None.
<PAGE>   64
                                  SCHEDULE 6.16
                              ENVIRONMENTAL MATTERS

None.
<PAGE>   65
                                  SCHEDULE 6.17
                                   PROPERTIES

Attached is a summary of the real and personal property the Company leases under
non-cancellable leases as of the date of the Stock Purchase Agreement.

Attached is a detail listing of the cost and net book value of the Company's
property, plant and equipment on the June 30, 2001 Financial Statements.

The Company's debt is secured by the following items:

Stillwater National Bank Line of Credit - Secured by all assets of the Company.
Note Payable - S&R - Secured by the CNC Equipment.

Operating Leases - Secured by the leased asset.
<PAGE>   66
                            AUDIO INNOVATIONS, INC.
                                 Schedule 6.18
                                   Insurance


          <TABLE>
          <CAPTION>
               Insurer                  Insurance Type
          <S>                           <C>
          Hanover Insurance Co          Umbrella Insurance
          Northwestern Mutual Life      Life
          Hanover Insurance Co          Business Auto Policy
          Hanover Insurance Co          Commercial Lines Policy
          State Insurance Fund          Worker's Compensation
          Sun Life of Canada            Supplemental Life
          HealthFirst TPA               Health/Life Insurance    Med. Plan
          Safeco                        Auto Insurance
          </TABLE>


<PAGE>   67
                                  SCHEDULE 6.19
                     DEVELOPMENT AND DISTRIBUTION AGREEMENTS

The Company has no material contracts relating to the development of Company's
Products or development of Products for others or for services of independent
contractors. See attached schedule for a listing of
<PAGE>   68
                                  SCHEDULE 6.20
                                 OTHER CONTRACTS

Loans:
Stillwater National Bank Line of Credit
Note Payable - S&R
<PAGE>   69
                                  SCHEDULE 6.21
                         EMPLOYMENT CONTRACTS AND PLANS


Attached is the Company's employee manual describing the employee benefit plans.

Attached is a listing of all employees with compensation in excess of $75,000
for calendar year 2000 and their annual base salary, excluding commissions, as
of June 30, 2001 and their Form W-2 wages for calendar year 2000.










<PAGE>   70
                                  Schedule 6.23

INTELLECTUAL PROPERTY

The Company has registered the following trademarks, trade names, service marks,
copyrights at the date of the Stock Purchase Agreement:

Audio Innovations
AI Research
Garage Storage Cabinets
Garage Storage Cabinets - Storage System
Q-Logic
Q-Forms
The Right Stuff
Bass Boxx
Impact Mobile Audio Monitors
Tri-Point Suspension
<PAGE>   71
                                  SCHEDULE 6.24
                                    INVENTORY

Video and related inventory.

An amount not to exceed 5% of the non-video inventory for possibly excess,
slow-moving and obsolete items.
<PAGE>   72
                                  SCHEDULE 6.25
                                   RECEIVABLES

Attached is the detailed accounts receivable listing as of June 30, 2001.
<PAGE>   73
                                  SCHEDULE 6.26
                                     RECORDS

The books of account are maintained on the accounting basis used by the company
for income tax purposes, which is a comprehensive basis of accounting other than
generally accepted accounting principles. See Schedule 6.8 for the listing of
adjustments which, if material, may be required to present the Financial
Statements in accordance with generally accepted accounting principles.
<PAGE>   74
                                  SCHEDULE 6.28
                          ABSENCE OF CHANGES OR EVENTS

None.
<PAGE>   75
                                  EXHIBIT 10.3
                               OPINION OF COUNSEL

_____________, 2001


Rockford Corporation
600 South Rockford Drive
Tempe, Arizona 85281


                  Re:  Transaction (the "Transaction") among Rockford
                       Corporation, an Arizona corporation ("you"), Audio
                       Innovations, Inc., an Oklahoma corporation ("Company"),
                       and the Shareholders of the Company

Ladies and Gentlemen:

                  We have acted as counsel to the Company and David and Yvonne
Cunningham (collectively, "Seller") in connection with the Transaction evidenced
by the Documents (as defined below). You have requested our opinion about
certain matters pursuant to Section 10.3 of the Agreement (as defined below).
Capitalized terms used and not otherwise defined in this letter shall have the
meanings ascribed to them in the Documents.

                  For purposes of this opinion, we have examined such questions
of law and fact as we have deemed necessary or appropriate, and have examined
the following documents (collectively, the "Documents"):

                  a. Stock Purchase Agreement, dated _______, 2001, among the
Company, its Shareholders and you (the "Agreement"); and

                  b. Employment Agreement, dated _______, 2001, between you and
David Cunningham.

                  We have further examined:

                  i. The Articles of Incorporation and bylaws of Company, as
amended to date;


<PAGE>   76
                  ii. A Certificate of Good Standing with respect to Company,
dated _______, 2001; and

                  iii. A Certificate of the President of Company, dated
___________, 2001 (the "Officer's Certificate").

                  Based on the foregoing, and subject to the qualifications set
forth below, it is our opinion that:

                  1. Company is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Oklahoma.

                  2. Company's authorized capital consists of [50,000] common
shares, par value $1.00 per share, of which [550] shares are issued and
outstanding (the "Shares"). The Shares have been duly authorized and are validly
issued, fully paid, and nonassessable.

                  3. Company has the requisite corporate power and corporate
authority (i) to own and operate its properties and assets; (ii) to carry out
its business as such business is currently being conducted; and (iii) to carry
out the terms and conditions applicable to it under the Agreement. The
execution, delivery, and performance of the Agreement by Company have been duly
authorized by all requisite corporate action on the part of Company and the
applicable Documents have been duly executed and delivered by Seller.

                  4. Based solely upon our knowledge, the representations of
Company in the Officer's Certificate, and our examinations as of _________,
2001, of the records of the filings in [the ________ Court of ________ and
United States District Court for the District of Oklahoma], from _________,
20__, through _________, 20__, there is no pending or overtly threatened
litigation or other legal proceeding against Company.

                  5. The execution and delivery of the Agreement and
consummation of the Transaction by Seller will not conflict with or result in a
violation of any applicable law or rule affecting Seller.

                  6. No consent, approval, authorization, or other action by, or
filing with, any federal, state, or local governmental authority is required in
connection with the execution and delivery by Seller of the Documents and the
consummation of the Transaction [or, if any of the foregoing is required, it has
been obtained].

                  7. The execution and delivery of the Agreement and
consummation of the Transaction by the Company will not conflict with or result
in a violation of Company's Articles of Incorporation or bylaws.

                  8. Based solely upon our knowledge, a review of judgments,
orders, and decrees disclosed by Company in the Officer's Certificate, and by a
search of the records of [the _________Court of __________ and the United States
District Court for the District of Oklahoma for the past ____ years], the
execution and delivery of the Agreement and
<PAGE>   77
consummation of the Transaction by Company will not conflict with or result in a
violation of any judgment, order, or decree of any court or governmental agency
to which Company is a party or by which it is bound.

                  9. Based solely upon our knowledge and a review of those
agreements disclosed to us by Company in the Officer's Certificate, the
execution and delivery of the Agreement, and consummation of the Transaction by
Company will not conflict with or result in a violation of any contract,
indenture, instrument, or other agreement to which Company is a party or by
which it is bound.

                  10. The Documents constitute legal, valid, and binding
obligations of Seller, as applicable, enforceable in accordance with their
terms.

                  11. Seller has paid all sales, transfer, documentary and other
taxes (other than income taxes) payable in connection with the sale of the
Shares to you.

                  In rendering the foregoing opinions we have assumed:

                  (i) The genuineness of the signatures not witnessed, the
authenticity of documents submitted as originals, and the conformity to
originals of documents submitted as copies;

                  (ii) The legal capacity of all natural persons executing the
Documents;

                  (iii) That the Documents accurately describe and contain the
mutual understanding of the parties, and that there are no oral or written
statements or agreements that modify, amend, or vary, or purport to modify,
amend, or vary, any of the terns of the Documents; and

                  (iv) That Company owns all of the property, assets, and rights
purported to be owned by it.

                  The opinions set forth above are subject to the following
qualifications and limitations:

                  a. The enforceability of the Documents may be subject to or
limited by bankruptcy, insolvency, reorganization, arrangement, moratorium, or
other similar laws relating to or affecting the rights of creditors generally;

                  b. The enforceability of the Documents is subject to general
principles of equity; and

                  c. The enforceability of the Documents is further subject to
the qualification that certain waivers, procedures, remedies, and other
provisions of the Documents may be unenforceable under or limited by the law of
the State of Oklahoma; however, such law does not, in our opinion, substantially
prevent the practical realization of the benefits intended by the
<PAGE>   78
Documents.

                  We are qualified to practice law in the State of Oklahoma, and
we do not purport to be experts on, or to express any opinion concerning, any
law other than the law of the State of Oklahoma and applicable federal law. The
Documents state that they are to be governed by the laws of Arizona. We are not
familiar with those laws and render no opinion about them. For purposes of our
opinion we have assumed, with your consent, that the Documents will be governed
by the laws of Oklahoma notwithstanding their express terms. We express no
opinion about what law will actually govern the Documents.

                  The opinions expressed in this letter are based upon the law
in effect on the date hereof, and we assume no obligation to revise or
supplement this opinion should such law be changed by legislative action,
judicial decision, or otherwise.

                  This opinion is being furnished to you solely for your benefit
and only with respect to the Transaction. Accordingly, it may not be relied upon
by, quoted in any manner to, or delivered to, any person or entity without, in
each instance, our prior written consent.

                                 Very truly yours,
<PAGE>   79


                                  EXHIBIT 10.4

                                   CERTIFICATE
                                       OF
                             SELLER AND SHAREHOLDERS

      This Certificate is issued pursuant to the Stock Purchase Agreement
("Agreement") dated _______________, 2001, among Rockford Corporation
("Purchaser"), Audio Innovations, Inc. ("Company"), and Company's Shareholders
("Shareholders"). Terms used in this Certificate have the same meaning given in
the Agreement.

      THE COMPANY AND SHAREHOLDERS CERTIFY THAT:

      1. THE CONDITIONS STATED IN SECTION 10 OF THE AGREEMENT HAVE BEEN
COMPLETELY MET IN ALL MATERIAL RESPECTS;

      2. THE REPRESENTATIONS AND WARRANTIES OF COMPANY AND ITS SHAREHOLDERS
IN SECTION 6 OF THE AGREEMENT ARE TRUE AND CORRECT WHEN MADE AND ON THE
CLOSING DATE; AND

      3. THE COMPANY AND SHAREHOLDERS HAVE PERFORMED ALL COVENANTS, AGREEMENTS,
AND OBLIGATIONS REQUIRED OF THEM BY THE AGREEMENT, AND EXECUTED AND DELIVERED TO
PURCHASER ALL DOCUMENTS REQUIRED TO BE DELIVERED AT OR PRIOR TO THE CLOSING,
INCLUDING THE AGREEMENT ITSELF.



                                    AUDIO INNOVATIONS, INC.


                                    ----------------------------------
                                    By: President


                                    ----------------------------------
                                    David Cunningham, Shareholder


                                    ----------------------------------
                                    Bonnie Cunningham, Shareholder


                                    ----------------------------------
                                    William Basore, Shareholder

<PAGE>   80
                                  EXHIBIT 11.3
                               OPINION OF COUNSEL

____________, 2001



Audio Innovations, Inc.,
  and its Shareholders
  listed on Exhibit A

[Address]


                  Re:      Transaction (the "Transaction") among Rockford
                           Corporation, an Arizona corporation ("Buyer"), Audio
                           Innovations, Inc., an Oklahoma corporation
                           ("Company"), and the Shareholders of the Company
                           ("Shareholders" and, together with Company, "Seller")

Ladies and Gentlemen:

                  We have acted as counsel to Buyer in connection with the
Transaction evidenced by the Documents (as defined below). You have requested
our opinion about certain matters pursuant to Section 11.3 of the Agreement (as
defined below). Capitalized terms used and not otherwise defined in this letter
shall have the meanings ascribed to them in the Documents.

                  For purposes of this opinion, we have examined such questions
of law and fact as we have deemed necessary or appropriate, and have examined
the following documents (collectively, the "Documents"):

                  c. Stock Purchase Agreement, dated _______, 2001, between
Seller and Buyer (the "Agreement"); and

                  d. Employment Agreement, dated _______, 2001, between Buyer
and David Cunningham.

                  We have further examined:

                  iv. The Articles of Incorporation and bylaws of Buyer, as
amended to date; and
<PAGE>   81
                  v. A Certificate of Good Standing with respect to Buyer, dated
June 27, 2000.

                  Based on the foregoing, and subject to the qualifications set
forth below, it is our opinion that:

                  12. Buyer is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Arizona.

                  13. Buyer has the requisite corporate power and corporate
authority (i) to own and operate its properties and assets; (ii) to carry out
its business as such business is currently being conducted; and (iii) to carry
out the terms and conditions applicable to it under the Documents. The
execution, delivery, and performance of the Documents by Buyer have been duly
authorized by all requisite corporate action on the part of Buyer and the
applicable Documents have been duly executed and delivered by Buyer.

                  14. The execution and delivery of the Documents and
consummation of the Transaction by the Buyer will not conflict with or result in
a violation of Buyer's Articles of Incorporation or bylaws.

                  15. The Documents constitute legal, valid, and binding
obligations of Buyer, enforceable in accordance with their terms.

                  In rendering the foregoing opinions we have assumed:

                  (v) The genuineness of the signatures not witnessed, the
authenticity of documents submitted as originals, and the conformity to
originals of documents submitted as copies;

                  (vi) The legal capacity of all natural persons executing the
Documents;

                  (vii) That the Documents accurately describe and contain the
mutual understanding of the parties, and that there are no oral or written
statements or agreements that modify, amend, or vary, or purport to modify,
amend, or vary, any of the terns of the Documents; and

                  (viii) That Buyer owns all of the property, assets, and rights
purported to be owned by it.
<PAGE>   82
                  The opinions set forth above are subject to the following
qualifications and limitations:

                  d. The enforceability of the Documents may be subject to or
limited by bankruptcy, insolvency, reorganization, arrangement, moratorium, or
other similar laws relating to or affecting the rights of creditors generally;

                  e. The enforceability of the Documents is subject to general
principles of equity; and

                  f. The enforceability of the Documents is further subject to
the qualification that certain waivers, procedures, remedies, and other
provisions of the Documents may be unenforceable under or limited by the law of
the State of Arizona; however, such law does not, in our opinion, substantially
prevent the practical realization of the benefits intended by the Documents.

                  We are qualified to practice law in the State of Arizona, and
we do not purport to be experts on, or to express any opinion concerning, any
law other than the law of the State of Arizona and applicable federal law.

                  The opinions expressed in this letter are based upon the law
in effect on the date hereof, and we assume no obligation to revise or
supplement this opinion should such law be changed by legislative action,
judicial decision, or otherwise.

                  This opinion is being furnished to you solely for your benefit
and only with respect to the Transaction. Accordingly, it may not be relied upon
by, quoted in any manner to, or delivered to, any person or entity without, in
each instance, our prior written consent.

                                                       Very truly yours,



                                                       Steptoe & Johnson LLP
<PAGE>   83
                                    Exhibit A
                                  Shareholders


David Cunningham

Yvonne Cunningham

William Basore
<PAGE>   84
                                  EXHIBIT 11.4
                                   CERTIFICATE
<PAGE>   85
                            CERTIFICATE OF PURCHASER

         This Certificate is issued pursuant to the Stock Purchase Agreement
("Agreement") dated __________________, 2001, among Rockford Corporation
("Purchaser"), Audio Innovations, Inc. ("Company"), and Company's Shareholders
("Shareholders"). Terms used in this Certificate have the same meaning given in
the Agreement.

         THE PURCHASER CERTIFIES THAT:

         1. THE CONDITIONS STATED IN SECTION 11 OF THE AGREEMENT HAVE BEEN
COMPLETELY MET IN ALL MATERIAL RESPECTS;

         2. THE REPRESENTATIONS AND WARRANTIES OF PURCHASER IN SECTION 7 OF THE
AGREEMENT ARE TRUE AND CORRECT WHEN MADE AND ON THE CLOSING DATE; AND

         3. PURCHASER HAS PERFORMED ALL COVENANTS, AGREEMENTS, AND OBLIGATIONS
REQUIRED OF IT BY THE AGREEMENT, AND EXECUTED AND DELIVERED TO COMPANY'S
SHAREHOLDERS ALL DOCUMENTS REQUIRED TO BE DELIVERED AT OR PRIOR TO THE CLOSING.

                                     ROCKFORD CORPORATION



                                     ---------------------------------
                                     By: President