Document:

exv10w4

 

Exhibit 10.4

Rockford Corporation

2005 Stock Option Plan

	1.	 	Purpose.

The Rockford Corporation 2005 Stock Option Plan is intended to assist in attracting and
retaining employees and directors and to motivate such individuals to use their best efforts
on behalf of the Corporation.

	2.	 	Definitions.

The following terms have the following meanings:

	 	2.1	 	“1933 Act” means the Federal Securities Act of 1933 and applicable state
securities laws.
	 
	 	2.2	 	“1934 Act” means the Securities Exchange Act of 1934.
	 
	 	2.3	 	“Board” means the Board of Directors of Rockford Corporation.
	 
	 	2.4	 	“Code” means the Internal Revenue Code of 1986.
	 
	 	2.5	 	“Committee” means the Compensation Committee of the Board of Directors of
Rockford Corporation.
	 
	 	2.6	 	“Corporation” means Rockford Corporation and any Subsidiary.
	 
	 	2.7	 	“Fair Market Value” means, as applied to a specific date, the closing price for
the Stock on such date as reported on the principal stock exchange upon which the
Corporation’s Stock is listed (currently, the Nasdaq Stock Market — National Market
System (“NASDAQ”); or, if the stock is not listed, then the mean between the most
recent bid and asked prices of any other recognized trading market or if no stock was
traded on the relevant date, on the next preceding day on which the Stock was so
traded. If no such market exists, then the Committee shall determine in good faith the
fair market value of the Stock.
	 
	 	2.8	 	“Grant Date” means the date on which an Option is granted as specified by the
Committee, contingent on the Optionee executing a Stock Option Agreement in form
satisfactory to the Committee.
	 
	 	2.9	 	“Incentive Option” means an Option eligible for tax treatment as an incentive
option under Section 422 of the Code.
	 
	 	2.10	 	“Non-Qualified Option” means an Option that is not eligible for tax treatment
as an incentive option under Section 422 of the Code.

 

 

	 	2.11	 	“Option” means an option to purchase Stock granted under this Plan.
	 
	 	2.12	 	“Optionee” means an employee or director to whom an Option has been granted
under the Plan.
	 
	 	2.13	 	“Plan” means the Rockford Corporation 2005 Stock Option Plan, the terms and
conditions of which are covered in this instrument.
	 
	 	2.14	 	“Stock” means the common stock of the Corporation.
	 
	 	2.15	 	“Stock Option Agreement” means a written agreement entered into between the
Corporation and the Optionee that provides for the price and terms of an Option.
	 
	 	2.16	 	“Subsidiary” means any corporation of which the majority of the outstanding
capital stock is owned, directly or indirectly, by the Corporation and which meets the
definition of a subsidiary corporation as set forth in Section 424(f) of the Code, at
the time of the granting of the Option.
	 
	 	2.17	 	“Ten Percent Shareholder” means an individual who owns more than 10% of the
total combined voting power of all classes of stock of the Corporation.

	3.	 	Administration.

	 	3.1	 	The Plan shall be administered by the Compensation Committee of the Board,
which Committee shall satisfy the requirements for “outside directors” as set forth in
section 162 (m) of the Code and “non-employee directors” as set forth in rule 16b-3 of
the 1934 Act. Without limiting the powers of the Committee, the Committee shall have
the power to determine the times during which any Option shall be exercisable, the
events upon which any Option shall terminate, the amounts, if any, payable to
beneficiaries of an Optionee upon the death of such Optionee, the exercisability of any
Option on the sale of all, or substantially all, of the assets of the Corporation, or a
merger where the Corporation is not the surviving corporation (other than a merger that
is only a change in form), and other terms of exercise. No member of the Committee
shall be eligible to vote on the grant of Options to him or her. All decisions and
determinations of the Committee in administering the Plan shall be final.
	 
	 	3.2	 	If changes are made to the Code that make it advisable, in the Committee’s sole
discretion, to change the character of Options for income tax purposes, the Committee
may change the character of Options and may impose on Options any conditions deemed
necessary or appropriate to comply with the Code requirements. However, except as
otherwise provided herein, the Committee may not change the character or terms of an
outstanding Option without the Optionee’s consent.

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	 	3.3	 	The Committee, subject to the provisions of the Plan, shall make determinations
regarding:

	 	(a)	 	The employees or directors who shall receive Options, the times
when such Options shall be granted, the time limits within which Options may be
exercised (subject to the provisions of this Plan), the number of shares
subject to each Option, and the terms and provisions of Stock Option Agreements
(which need not be identical);
	 
	 	(b)	 	Interpretation of Plan provisions;
	 
	 	(c)	 	Rules and regulations relating to the Plan;
	 
	 	(d)	 	Stock Option Agreements under the Plan; and
	 
	 	(e)	 	Other determinations advisable for the proper administration of
the Plan.

	4.	 	Tax and Other Characteristics of Options.

	 	4.1	 	Options granted pursuant to the Plan may be designated, but need not be
designated, as Incentive Options. The Stock Option Agreement shall provide whether an
Option is an Incentive Option or a Non-Qualified Option. In the case of Incentive
Options, the aggregate fair market value of the Stock (at the time the Option is
granted) for Options that are exercisable for the first time by an Optionee during any
calendar year (under all stock option plans of the Corporation) shall not exceed
$100,000. Non-employee directors of the Corporation shall not be eligible for the
grant of Incentive Options.
	 
	 	4.2	 	At all times during the period beginning on the date of grant of the Incentive
Option and ending on the day three months before the date of exercise of an Incentive
Option, the Optionee must be an Employee of the Corporation or a Subsidiary. Such
3-month period shall be extended to twelve (12) months if employment ends due to a
total disability. If the Optionee terminates employment due to death or dies within the
allowable period specified in the Option Agreement for exercise after termination of
employment, the Option may be exercised (to the extent the Optionee was entitled to
exercise the Option on the date of death) by the Optionee’s estate, or by a person who
acquired the right to exercise the Option by bequest or inheritance, or by a person
designed to exercise the Option upon the Optionee’s death, but only within a period
ending upon the earlier of (i) 90 days after the date of death or (ii) the expiration
of the term of the Option set forth in the Option Agreement. Additional limitations
may be imposed by the terms of the Option Agreement.

	5.	 	Stock Subject to the Plan.

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	 	5.1	 	Subject to adjustments under Section 11, the aggregate number of shares of
Stock that may be issued on the exercise of Options (either as Incentive Options,
Non-Qualified Options, or a combination) shall not exceed 500,000. Such Stock may be
authorized but unissued shares or treasury shares, as the Committee determines.
	 
	 	5.2	 	If an Option expires or is terminated, the shares of Stock allocated for
issuance under such Option may be allocated to a new Option under the Plan.

	6.	 	Eligibility.

All individuals who are officers, directors, advisory directors or employees of the
Corporation or a Subsidiary, including employees who are officers or directors, shall be
eligible for selection by the Committee to receive Options under the Plan. Only officers
and employees of the Corporation or a Subsidiary may receive Incentive Options under the
Plan.

	7.	 	Option Exercise Price and Payment of Withholding Taxes.

The Committee shall determine the price at which shares of Stock may be purchased on the
exercise of any Option at the time an Option is granted. The price shall not be less than
100% of the fair market value of the Stock at the Grant Date, but if the Corporation desires
to grant an Incentive Option to a Ten Percent Shareholder, the price at which shares may be
purchased under such Option shall not be less than 110% of the fair market value of the
Stock at the Grant Date. Also, any eligible individual shall pay to the Corporation (or
make arrangements for such payment) any applicable federal and state income and withholding
taxes the Corporation determines are payable on the spread between the fair market value of
the Stock at the date of exercise and the Option price.

	8.	 	Term and Vesting of Options.

	 	8.1	 	The Committee shall determine the term of each Option at the Grant Date. In no
case, however, shall the term of any Option exceed ten years from the Grant Date, or
five years in the case of a grant of an Incentive Option to a Ten Percent Shareholder.
	 
	 	8.2	 	Unless otherwise specified by the Committee in the Option Agreement, 25% of the
Options granted to an individual will be exercisable immediately on the Grant Date,
with another 25% becoming exercisable on each of the first, second, and third
anniversary of the Grant Date. Notwithstanding the previous sentence, and unless
otherwise specified by the Committee in the Option Agreement, Options will be 100%
exercisable when the Optionee attains age 65. These provisions are subject to the
other terms and conditions of the Option Agreement (including the termination date of
the Options).

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	 	8.3	 	Unless specifically stated otherwise in the Option Agreement, all outstanding
Options will become vested and exercisable immediately upon a Change of Control of the
Corporation. For this purpose, “Change of Control” shall be deemed to have occurred
if, after the Effective Date (i) any “person” (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation
representing twenty-five percent (25%) or more of the combined voting power of the
Corporation’s then outstanding securities, (ii) upon the first purchase of the
Corporation’s Stock pursuant to a tender or exchange offer (other than a tender or
exchange offer made by the Corporation) or (iii) directors who are not “continuing
directors” become a majority of the Board of Directors. A “continuing director” is a
director who (a) is a director on the date of adoption of this plan, (b) is nominated
to become a director by the Nominating Committee of the corporation and is recommended
by a majority of the continuing directors, or (c) has served as a director for 24
months.
	 
	 	8.4	 	If, in connection with any merger, consolidation, sale or transfer by the
Corporation of substantially all its assets, any Option is not to be assumed by the
surviving corporation or the purchaser, then the Committee, in its sole discretion, may
advance the date on which such Option or any portion of such Option not then
exercisable, may be exercised.

	9.	 	Payment on Exercise of Options.

The price of an exercised Option and any taxes required to be paid by the Optionee on
exercise of such Option shall be paid:

	 	(a)	 	In cash; or
	 
	 	(b)	 	At the discretion of the Committee, through the delivery of
Stock with a fair market value equal to the exercise price and withholding
taxes, if any; or
	 
	 	(c)	 	At the discretion of the Committee, through a combination of
(a) and (b).

	10.	 	Non-Transferability of Options.

	 	10.1	 	Except as provided in 10.2, below, Options shall not be transferable by the
Optionee, but if an Optionee dies, his or her personal representative may exercise an
Option within 90 days of the date of the Optionee’s death (if the Option is otherwise
exercisable), subject to Section 4.2.
	 
	 	10.2	 	Options may be transferable pursuant to a valid decree of divorce, provided,
however, that any Incentive Options required to be so transferred shall cease to be
Incentive Options and become Non-Qualified Options.

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	11.	 	Adjustments.

If the Corporation:

	 	(a)	 	declares a dividend or makes a distribution on its Stock
payable in Stock or securities convertible into Stock; or
	 
	 	(b)	 	recapitalizes through a split-up of the outstanding shares of
Stock into a greater number or a combination of the outstanding Stock into a
lesser number; or
	 
	 	(c)	 	issues, by reclassification of its Stock, any share of Stock,
or
	 
	 	(d)	 	reorganizes, merges, consolidates, splits-up, combines, or
exchanges shares or engages in any similar transaction to those described in
this Section 11 with respect to the Stock,

the Committee shall make appropriate and equitable adjustments in the number and kind of
            shares subject to outstanding Options under the Plan. Any other adjustments to the Options
shall be within the sole discretion of the Committee, and if required, shall in all events
comply with Section 409A of the Code so as not to create a modification of the Option. If
the adjustment would produce fractional shares with respect to any unexercised Option, the
Committee may adjust appropriately the number of shares covered by the Option to eliminate
the fractional shares. The price of any shares subject to an outstanding Option shall be
adjusted so there will be no change in the aggregate purchase price payable upon the
exercise of the Option, and such price may be changed at the Committee’s discretion, to
avoid any substantial dilution or enlargement of the rights granted or available to
Optionees under the Plan or to shareholders of the Corporation; provided that any such
adjustment will comply with Section 409A of the Code, if required, so as not to create a
modification of the Option.

	12.	 	Additional Restrictions.

Notwithstanding any other provisions of the Plan, any Stock Option Agreement may contain
such additional or more restrictive provisions as the Committee deems advisable and
consistent with the Plan.

	13.	 	Registration.

The Plan, the Stock to be issued pursuant to the exercise of Options, or the Options granted
under the Plan, may be registered under the Act.

	14.	 	Effective Date of Plan.

The Plan shall become effective as of November 1, 2005 and shall remain in effect for ten
years from its effective date, unless the Board terminates it earlier. No Incentive

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Options may be issued under the Plan unless the stockholders of the Corporation approve the
Plan within one year from the date the Plan is adopted by the Corporation.

	15.	 	Amendments and Termination.

The Board, in its discretion and at any time, may modify, amend or terminate the Plan.
Neither the termination of the Plan, nor any modification or amendment thereof, shall
adversely affect any rights under an Option previously granted under the Plan without the
consent of the Optionee except as provided in the Plan. Notwithstanding the foregoing, the
Board may amend the Plan to the extent necessary to cause Options granted under the Plan to
meet the requirements of the Act and the Code and regulations thereunder.

	16.	 	Miscellaneous.

	 	16.1	 	Nothing in the Plan or any Option granted shall confer upon any person any
right to continue in the service of the Corporation or a Subsidiary.
	 
	 	16.2	 	The grant of Options under the Plan, the issuance and delivery of shares upon
the exercise of Options, and any other matters relating thereto shall be subject to all
laws, rules and regulations as may from time to time be applicable, including but not
limited to, any and all rules and regulations of any stock exchange or exchanges upon
which the shares of the Corporation may be listed and all applicable federal and state
securities laws.
	 
	 	16.3	 	No person shall acquire any rights as an Optionee under this Plan unless and
until a Stock Option Agreement in the form and containing the terms specified by the
Committee shall have been duly executed on behalf of the Corporation by such officer or
officers as the Committee shall designate for such purpose, delivered to the Optionee
named therein, and executed by the Optionee.
	 
	 	16.4	 	No person shall have any rights as a shareholder with respect to any shares
covered by an Option granted pursuant to the Plan until the date of the issuance of a
share certificate to the Optionee for such shares.

	17.	 	Governing Law.

All rights under this Plan shall be governed by and construed in accordance with the laws of
the state of Arizona. The Plan is intended to comply with all applicable securities laws
and to meet the requirements for Incentive Stock Options and the “performance-based”
exception to section 162(m) of the Code, as well as the requirements of a stock option plan
exempt from Section 409A of the Code, and the Plan shall be construed and interpreted in a
manner that reflects such intent.

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	18.	 	Execution.

The President of the Corporation has been authorized to execute this Plan and has executed
the Plan on the date indicated below.

ROCKFORD CORPORATION

____________________________________

President

____________________________________

Date

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Exhibit 10.70

FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

AND CONSENT

     THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND CONSENT (this “Amendment”),
dated as of March 21, 2006, is entered into among WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN), a
California corporation formerly known as Congress Financial Corporation (Western)
(“Agent”), as administrative and collateral agent for the Lenders party to the Loan
Agreement (as defined below) from time to time (“Lenders”), WACHOVIA CAPITAL FINANCE
CORPORATION (WESTERN), a California corporation formerly known as Congress Financial Corporation
(Western), as a Lender (“Wachovia”), ROCKFORD CORPORATION, an Arizona corporation
(“Borrower Agent”), and AUDIO INNOVATIONS, INC., an Oklahoma corporation (“AII” and
together with Rockford, collectively, “Borrowers”).

RECITALS

     A. Agent, Wachovia, Wachovia Bank, National Association, as arranger, and Borrowers have
previously entered into that certain Loan and Security Agreement dated March 29, 2004 as amended by
the First Amendment to Loan and Security Agreement and Conditional Default Waiver dated as of June
10, 2004, the Second Amendment to Loan and Security Agreement dated as of December 30, 2004 and the
Third Amendment to Loan and Security Agreement dated as of August 31, 2005 (the “Loan
Agreement”), pursuant to which Wachovia has made certain loans and financial accommodations
available to Borrowers. Terms used herein without definition shall have the meanings ascribed to
them in the Loan Agreement.

     B. Borrowers now desire that substantially all of the assets of AII be sold to, and
substantially all of the liabilities of AII be assumed by, Advanced Integration, LLC
(“Purchaser”) for the total sale price of $1,750,000, of which $750,000 will be paid in
cash at the closing of such sale and $1,000,000 will be paid over thirty (30) months following the
closing of such sale (the “Sale”).

     C. Borrowers have requested Agent and Wachovia to amend the Loan Agreement in certain respects
and to consent to the Sale, and Agent and Wachovia are now willing to accommodate such request on
the terms and conditions set forth herein.

     D. Borrowers are entering into this Amendment with the understanding and agreement that,
except as specifically provided herein, none of Agent’s or Lenders’ rights or remedies as set forth
in the Loan Agreement is being waived or modified by the terms of this Amendment.

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

 

 

     1. Amendment to Loan Agreement. Section 9.17.1 of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:

“9.17.1 EBITDA. Borrowers and their Subsidiaries, on a consolidated basis,
shall earn EBITDA, calculated as of the last day of each month set forth below on the basis
of the trailing twelve (12) months, of not less then the amount set forth opposite such
month:

	 	 	 	 	 
	Month	 	Amount	 
	February 2006
	 	$	3,200,000	 
	March 2006
	 	$	2,400,000	 
	April 2006
	 	$	1,900,000	 
	May 2006
	 	$	2,200,000	 
	June 2006
	 	$	2,300,000	 
	July 2006
	 	$	2,500,000	 
	August 2006
	 	$	2,400,000	 
	September 2006
	 	$	2,300,000	 
	October 2006
	 	$	2,600,000	 
	November 2006
	 	$	3,100,000	 
	 
	 	 	 	 
	Each month thereafter
	 	$	3,800,000	 

For the purposes hereof, ‘EBITDA’ shall mean the net income of Borrowers and
their Subsidiaries determined on a consolidated basis in accordance with GAAP consistently
applied, but excluding any extraordinary or one-time gains, plus (a) depreciation,
amortization and other non-cash charges (to the extent deducted in the computation of such
net income), plus (b) Interest Expense (to the extent deducted in the computation of
such net income), plus (c) charges for federal, state, local and foreign income
taxes (to the extent deducted in the computation of such income).”

     2. Consent. Agent and Wachovia hereby consent to the Sale and authorize the transfer
of the assets covered thereby to Purchaser free and clear of the security interests of Agent
therein, provided that, (a) Agent shall retain its security interests in the
proceeds of the Sale, (b) any such proceeds received by Borrowers in cash shall be remitted to
Agent in accordance with the Loan Agreement for application to the Obligations, and (c) any
instrument evidencing the deferred payment of the purchase price shall be duly endorsed and
delivered by Borrowers to Agent in accordance with the Loan Agreement to be held by Agent as
Collateral thereunder. This consent shall apply only to the Sale and not to any other or further
transactions, and except as specifically set forth herein, Agent and Wachovia reserve and preserve
their rights to require the strict compliance by Borrowers with all of the terms and provisions of
the Loan Agreement and other Financing Agreements.

2

 

     3. Effectiveness of this Amendment. Agent must have received the following items, in
form and content acceptable to Agent, before this Amendment and the consent provided herein are
effective.

          (a) Amendment; Acknowledgement. This Amendment and the attached Acknowledgement by
Guarantors, each fully executed in a sufficient number of counterparts for distribution to all
parties.

          (b) Representations and Warranties. The representations and warranties set forth
herein and in the Loan Agreement must be true and correct.

          (c) Other Required Documentation. All other documents and legal matters in connection
with the transactions contemplated by this Amendment shall have been delivered or executed or
recorded and shall be in form and substance satisfactory to Agent.

          4. Representations and Warranties. Each Borrower represents and warrants as follows:

          (a) Authority. Such Borrower has the requisite corporate power and authority to
execute and deliver this Amendment, and to perform its obligations hereunder and under the
Financing Agreements (as amended or modified hereby) to which it is a party. The execution,
delivery and performance by such Borrower of this Amendment have been duly approved by all
necessary corporate action and no other corporate proceedings are necessary to consummate such
transactions.

          (b) Enforceability. This Amendment has been duly executed and delivered by such
Borrower. This Amendment and each Financing Agreement (as amended or modified hereby) is the
legal, valid and binding obligation of such Borrower, enforceable against such Borrower in
accordance with its terms, and is in full force and effect.

          (c) Representations and Warranties. The representations and warranties contained in
each Financing Agreement (other than any such representations or warranties that, by their terms,
are specifically made as of a date other than the date hereof) are correct on and as of the date
hereof as though made on and as of the date hereof.

          (d) Due Execution. The execution, delivery and performance of this Amendment are
within the power of such Borrower, have been duly authorized by all necessary corporate action,
have received all necessary governmental approval, if any, and do not contravene any law or any
contractual restrictions binding on such Borrower.

          (e) No Default. No event has occurred and is continuing that constitutes an Event of
Default.

     5. Choice of Law. The validity of this Amendment, its construction, interpretation
and enforcement, and the rights of the parties hereunder, shall be determined under, governed by,
and construed in accordance with the internal laws of the State of California governing contracts
only to be performed in that State.

3

 

     6. Counterparts. This Amendment may be executed in any number of counterparts and by
different parties and separate counterparts, each of which when so executed and delivered, shall be
deemed an original, and all of which, when taken together, shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this Amendment by
telefacsimile shall be effective as delivery of a manually executed counterpart of this Amendment.

     7. Reference to and Effect on the Financing Agreements.

          (a) Upon and after the effectiveness of this Amendment, each reference in the Loan Agreement
to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Loan Agreement,
and each reference in the other Financing Agreements to “the Loan Agreement”, “thereof” or words of
like import referring to the Loan Agreement, shall mean and be a reference to the Loan Agreement as
modified and amended hereby.

          (b) Except as specifically amended above, the Loan Agreement and all other Financing
Agreements, are and shall continue to be in full force and effect and are hereby in all respects
ratified and confirmed and shall constitute the legal, valid, binding and enforceable obligations
of Borrowers to Agent and Lenders.

          (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of Agent or any Lender under any
of the Financing Agreements, nor constitute a waiver of any provision of any of the Financing
Agreements.

          (d) To the extent that any terms and conditions in any of the Financing Agreements shall
contradict or be in conflict with any terms or conditions of the Loan Agreement, after giving
effect to this Amendment, such terms and conditions are hereby deemed modified or amended
accordingly to reflect the terms and conditions of the Loan Agreement as modified or amended
hereby.

     8. Integration. This Amendment, together with the other Financing Agreements,
incorporates all negotiations of the parties hereto with respect to the subject matter hereof and
is the final expression and agreement of the parties hereto with respect to the subject matter
hereof.

     9. Severability. In case any provision in this Amendment shall be invalid, illegal or
unenforceable, such provision shall be severable from the remainder of this Amendment and the
validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

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     IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above
written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	ROCKFORD CORPORATION
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	AUDIO INNOVATIONS, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	WACHOVIA CAPITAL FINANCE
	 	 	CORPORATION (WESTERN),
	 	 	as Agent and as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

5

 

ACKNOWLEDGEMENT BY GUARANTORS

Dated as of March 21, 2006

     Each of the undersigned, being a guarantor (each a “Guarantor” and collectively, the
“Guarantors”) under their Guaranty and Security Agreement dated March 29, 2004, made in
favor of Agent and Lenders (as amended, modified or supplemented, the “Guaranty”) hereby
acknowledges and agrees to the foregoing Fourth Amendment to Loan and Security Agreement and
Consent (the “Amendment”) and confirms and agrees that the Guaranty is and shall continue
to be, in full force and effect and is hereby ratified and confirmed in all respects except that,
upon the effectiveness of, and on and after the date of the Amendment, each reference in the
Guaranty to the Loan Agreement (as defined in the Amendment), “thereunder”, “thereof” or words of
like import referring to the “Loan Agreement”, shall mean and be a reference to the Loan Agreement
as amended or modified by the Amendment. Although Lender has informed Guarantors of the matters
set forth above, and Guarantors have acknowledged the same, each Guarantor understands and agrees
that Lender has no duty under the Loan Agreement, the Guaranty or any other agreement with any
Guarantor to so notify any Guarantor or to seek such an acknowledgement, and nothing contained
herein is intended to or shall create such a duty as to any advances or transaction hereafter.

     If any action or proceeding is filed in a court of the State of California by or against any
Guarantor in connection with any of the transactions contemplated by the Loan Agreement or any
document related thereto, the court shall, and is hereby directed to, make a general reference
pursuant to California Code of Civil Procedure Section 638 to a referee or referees to hear and
determine all of the issues in such action or proceeding (whether of fact or of law) and to report
a statement of decision, provided that at the option of Lender, any such issues pertaining to a
“provisional remedy” as defined in California Code of Civil Procedure Section 1281.8 shall be heard
and determined by the court.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	ROCKFORD SINGAPORE CORPORATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ROCKFORD SALES.COM, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

6

 

	 	 	 	 	 	 	 
	 	 	MB QUART SHANGHAI, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}]]