1
EXHIBIT 10.8
(LOGO)
ROCKFORD
CORPORATION
Dealership Agreement
2
ROCKFORD CORPORATION DEALER AGREEMENT
This Agreement is between Rockford Corporation, an Arizona corporation
("Rockford"), and the person or entity names on the signature page of this
Agreement ("Dealer"). This Agreement supersedes any previous Agreement between
Rockford and Dealer. Rockford and Dealer agree as follows:
1. BACKGROUND.
1.1 ROCKFORD BUSINESS. Rockford is a manufacturer of high quality
consumer electronic products used in automotive, professional, and home
sound reproduction systems.
1.2 DEALER EXPERIENCE. Dealer has experience in the retail sale of high
quality consumer electronic products, is in a good and substantial
financial position, and is skilled at installing mobile audio and
associated electronics equipment in automobiles.
1.3 RELIANCE UPON DEALER ABILITY. The Products, as defined below, are
of a highly technical nature, their proper installation requires great
skill and experience, and their sale requires dealers who promote the
sale of Products vigorously and adhere to high sales and service
standards. Rockford has selected Dealer based on Dealer's
representations and agreements about its skill, experience, and ability
as set forth in this Agreement.
1.4 PURPOSE. The purpose of this Agreement is to state the terms and
conditions of Rockford's appointment of Dealer as an outlet for retail
sales of Products and of Dealer's acceptance of such appointment.
2. DEALERSHIP.
2.1 APPOINTMENT, PRODUCTS, AND TERRITORY. Rockford appoints Dealer and
Dealer accepts appointment as a retail dealer for sale of the Rockford
products (the "Products") from the retail outlets (the "Outlets") and
with primary responsibility for sales in the territory (the
"Territory") as each is described in the Addendum to this Agreement.
Dealer may not advertise or sell the Products outside the Territory, as
described in the Addendum.
2.2 LIMITED LICENSE OF NAMES. Rockford grants Dealer a right to use
during the term of this Agreement Rockford's trademarks and other
identification (the "Names") described in the Addendum, solely in
connection with advertising, promotion, and sales of the Products and
subject to the limitations set forth in this Agreement. Dealer may not
make other use of the Names, and may not use any other Rockford
trademarks, products, or other identification, unless Rockford gives
its prior written consent.
2.3 CHANGES; APPOINTMENT NOT EXCLUSIVE. Rockford may change the Outlets
or Territory, or may add or delete Products or Names from Dealer's
authority, at any time by giving notice of the change to Dealer which
notice shall be deemed an amendment to the Addendum. Dealer's
responsibility for the Territory is non-exclusive and Rockford may
appoint other dealers in the Territory.
3. TERMS AND CONDITIONS OF SALE. Dealer shall purchase and pay for
Products at Rockford's bona fide wholesale prices and on the terms and
conditions specified in the Addendum. Such terms and conditions may be
modified by Rockford upon notice to Dealer and such modified terms
shall be effective for orders accepted by Rockford after the date of
notice.
4. DUTIES OF ROCKFORD. Rockford shall:
4.1 supply Dealer with reasonable quantities of Rockford's standard
sales promotion, advertising, and product related materials without
cost to Dealer;
4.2 provide sales assistance and support as deemed necessary by
Rockford in the form of technical information or advisory personnel,
including information necessary to keep Dealer's sales personnel
informed about the Products; and
4.3 fill orders submitted by Dealer and accepted by Rockford. Rockford
shall have the right to accept, reject, or negotiate any order
submitted by Dealer. Rockford shall use its best efforts to make
deliveries with reasonable promptness; however, Rockford shall not be
liable to Dealer or any other person for any direct, indirect,
incidental or consequential damages incurred as a result of any delay
in delivery or error in filling an order.
3
5. DUTIES OF DEALER. Dealer shall:
5.1 actively and diligently promote the retail sale of Products from
the Outlets, and solicit sales from and provide support to existing and
potential Rockford retail customers within the Territory, on a regular
basis consistent with good business practice and the high standards
established by Rockford;
5.2 refrain from mail order, sales, telephone sales, and sales made
using the internet or other electronic media. Dealer shall sell
Products only to retail customers who visit an Outlet in connection
with each sale of the Products for resale without Rockford's prior
written consent;
5.3 in order to maintain and enhance the reputation of the Products for
high quality and service, thereby enhancing the prospects of Rockford
and Dealer for sales of the Products, focus its advertising of the
Products on the high quality of the Products;
5.4 achieve or exceed standards of performance, including minimum
purchase requirements for Products, established from time to time by
Rockford in its sole discretion. Dealer's initial minimum purchase
requirement shall be as listed in the Addendum and shall thereafter be
adjusted by Rockford on a regular basis by giving notice to Dealer,
which notice shall be deemed an amendment to the Addendum;
5.5 establish and maintain a staff of sales personnel familiar with
information about the Products provided by Rockford (including their
operating manuals) and capable of providing consumers with a full
explanation of the features and characteristics of the Products;
5.6 display Products so that each line of goods sold may be properly
demonstrated in a vehicle or in a store display. Rockford may delete
any Products that Dealer cannot properly demonstrate to a consumer;
5.7 maintain adequate facilities and personnel to meet Rockfords'
standards of performance, employ competent installation personnel, and
have appropriate installation equipment at each Outlet;
5.8 assist in any reasonable way any purchaser or prospective purchaser
of Products who may have either an inquiry or complaint;
5.9 follow Rockford's written instructions for proper installation of
Products;
5.10 not modify, repackage, adulterate, mishandle, alter, add labels
to, or remove labels from any of the Products;
5.11 conduct its own business under its individual, partnership or
corporate name. Dealer shall not use any Names as part of Dealer's
name; and
5.12 not engage in any practices or make any representations to any
customer or other person which are false, misleading, incomplete,
fraudulent, untrue or contrary to Rockford's sales policies or this
Agreement. Dealer shall make no representations to customers or others
with respect to Products except those approved in the current warranty
program or approved in writing by Rockford.
6. TERM AND TERMINATION. This Agreement is for an initial term of one year
from the date of acceptance by Rockford, and thereafter shall renew
each year for an additional one year term; provided, however, that this
Agreement may be terminated at any time by either party upon 30 days
notice of termination to the other. No termination shall (1) create any
liability for direct or consequential damages or (2) release Dealer
from any of its obligations accrued prior to termination.
7. SECURITY INTEREST. Dealer grants to Rockford a security interest in all
Products purchased from Rockford (and the proceeds of such Products),
to secure payment and performance of all obligations of Dealer to
Rockford. Dealer shall cooperate with Rockford to perfect this security
interest and shall execute any financing statements (including
amendments and continuation statements) and other documents reasonably
requested by Rockford. Dealer authorizes Rockford to execute on
Dealer's behalf and file any financing statements (including amendments
and continuation statements) and other documents as deemed necessary by
Rockford to evidence and perfect this security interest.
8. DEFAULT REMEDIES. Upon any default by Dealer, Rockford shall have the
right:
-2-
4
8.1 to terminate this Agreement immediately upon notice to Dealer. Such
termination shall not limit or exclude any and all other rights of
Rockford (including rights to recover damages, to offset damages
against any other amounts due, and to equitable relief) and shall not
act as an election of its remedies;
8.2 to declare, in its sole discretion, the entire amount then due
Rockford (including reasonable collection and attorneys fees and costs)
to be immediately due and payable;
8.3 to cancel orders placed by Dealer, or refuse or delay their
shipment, until the default is corrected in a manner satisfactory to
Rockford in its sole discretion;
8.4 to terminate Dealer's right to participate in Rockford special
program funds (such as Cooperative Advertising and Growth/Volume
Incentive Rebate programs) and cancel any outstanding amounts credited
to dealer in connection with such programs;
8.5 to establish additional requirements that Dealer must satisfy,
including credit or financial requirements, in order to continue as a
Rockford dealer;
8.6 to secure both temporary and permanent injunctive relief against
any actual or threatened default;
8.7 to recover direct, indirect, incidental, and consequential damages
resulting to Rockford as a result of the breach (which shall include
its costs in connection with the default, including reasonable
attorneys fees and costs); and
8.8 to exercise all rights and remedies as secured party under the
Uniform Commercial Code to enforce the security interest granted in
this Agreement.
The remedies set forth above shall be cumulative and shall not be
exclusive and Rockford's pursuit of one remedy shall not preclude its
simultaneous or subsequent pursuit of other remedies.
9. ROCKFORD'S OPTION TO REPURCHASE UPON TERMINATION. Upon termination of
this Agreement, Rockford may, at its option, repurchase all Products
still owned by Dealer at the original dealer cost, less freight and
reconditioning changes are required.
10. FINANCIAL CONDITION. Dealer shall provide to Rockford upon request
appropriate financial record to confirm Dealer's ability to fulfill its
obligations under this Agreement to Rockford and to Dealer's customers.
If, in Rockford's sole discretion, Dealer's ability to meet its
obligations is uncertain or Rockford is insecure, Rockford may suspend
or terminate this Agreement at any time without any liability. Dealer
agrees that Rockford may conduct confidential, periodic credit checks
at its discretion.
11. TAXES. Dealer is responsible for and shall pay promptly when due any
and all taxes, levies and assessments upon any Products in Dealer's
inventory, whether paid for or not.
12. MODIFICATION OF PRODUCTS. Rockford shall have the sole right to change
the design of the Products or terminate the production of Products, as
its business judgment requires and without liability to Dealer.
13. GOODWILL AND USE OF NAMES. All goodwill generated by the use of the
Names or promotion of the Products shall accrue to Rockford's benefit
and Dealer disclaims any ownership rights in the Names and goodwill of
Rockford. Dealer shall use the Names only in a manner and form approved
before use in writing by Rockford. Dealer acknowledges Rockford's
exclusive ownership of the Names and agrees not to use, advertise,
incorporate, or otherwise appropriate the Names for use in the
promotion of any other line of goods whether manufactured by Rockford
or not. Each use of the Names or any variation thereof must be
accompanied by a trademark designation "(R)" or "(TM)" (as instructed
by Rockford) and must include as a footnote to the ad copy in a size of
type no smaller than the type of the main body of the ad the words "A
Trademark of Rockford Corporation, Tempe, Arizona, U.S.A."
14. BUSINESS RELATIONSHIP. This Agreement does not create a relationship of
principal and agent, franchisor and franchisee, joint venture,
partnership, or employment. Neither party shall have any authority to
bind or obligate the other or shall be liable for any obligations
incurred by the other except as expressly provided herein. Dealer is an
-3-
5
independent retailer responsible for hiring its own employees,
exercising sole and absolute discretion, judgment and control over the
management and day-to-day operations of its business, and achieving the
objectives of its business. Dealer shall not act or represent itself,
directly or by implication, as an agent of Rockford with any authority
to bind or obligate Rockford in matters of contract, agreement,
warranty or otherwise.
15. INDEMNIFICATION. Dealer shall defend, indemnify and hold harmless
Rockford, and its employees and agents, from all fines, suits,
proceedings, claims, demands, debts, obligations, liabilities or
actions of any kind by anyone (including reasonable attorneys' fees and
costs) arising from or connected with the activities or operations of
Dealer, its employees, or agents. Rockford shall indemnify Dealer in
product liability actions brought against Dealer involving solely the
defective manufacture or design of Products; however, Rockford shall
not indemnify Dealer against product liability actions arising from any
practices or representations by Dealer to any customer or to the trade
which are false, misleading, incomplete, fraudulent, untrue or contrary
to Rockford's sales policies, standard contract terms or this
Agreement.
16. NOTICES. Notices under this Agreement shall be in writing and effective
upon delivery, in person or by facsimile, or three days after mailing,
first class mail, postage prepaid and return receipt requested, to the
addresses stated on the signature page of this Agreement (which may be
changed by notice). Notices sent by facsimile shall be confirmed by
mailing (in the same manner as mailed notices), but shall be effective
upon receipt of the facsimile transmission.
17. ADDENDUM. The Addendum is an integral part of this Agreement and is
incorporated in this Agreement by reference. All references to this
Agreement refer to this Agreement and the Addendum.
18. AMENDMENT AND WAIVER. This Agreement is the entire agreement of the
parties with respect to Dealer's appointment as a Rockford dealer and
supersedes all prior agreements and undertakings with respect to
agreements and undertakings with respect to its subject matter. Except
for changes to the Addendum, which may be made unilaterally by Rockford
upon notice to Dealer, this Agreement may be amended only by a written
document signed by both parties. Any waiver of a right, obligation or
default must be in writing and signed by all parties; no failure to
exercise any right or power under this Agreement or to insist upon
strict compliance by the other party hereunder shall constitute a
waiver for the right to exercise such right or power or insist on
strict compliance. A waiver of one right, obligation or default shall
not be construed as a waiver of any other or subsequent right,
obligation or default.
19. GOVERNING LAW. Arizona law shall govern this Agreement and any dispute
arising out of or in any way relating to this Agreement or the parties'
relationship under this Agreement.
20. JURISDICTION AND VENUE. The exclusive jurisdiction and venue for any
dispute arising out of or in any way relating to this Agreement or the
parties' relationship under this Agreement shall be in the Superior
Court for Maricopa County, Arizona, and each party consents to the
jurisdiction of such court of this purpose.
21. WAIVER OF JURY TRIAL. Any dispute arising out of or in any way relating
to this Agreement or the parties' relationship under this Agreement
shall be tried to the court, without a jury, and each party hereby
irrevocably waives any right to request a jury trial in connection with
such a dispute.
22. DISCLAIMER OF DAMAGES. Dealer irrevocably waives and relinquishes any
right to recover consequential or punitive damages in any dispute
arising out of or in any way relating to this Agreement or the parties'
relationship under this Agreement.
23. ATTORNEYS' FEES. In any proceeding arising out of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees, costs
and other expenses incurred in connection with such proceeding.
24. SEVERABILITY. If any provision of the Agreement is deemed contrary to,
prohibited by, or invalid under applicable law, or is inoperative for
any reason, that provision shall be deemed modified to the extent
necessary to make it valid and
-4-
6
operative, or if it cannot be so modified, then severed. The remainder
of this Agreement shall continue in full force and effect as if the
Agreement had been signed with the invalid provision so modified or
eliminated.
25. NO THIRD PARTY BENEFICIARIES. This Agreement shall not create any third
party beneficiary rights.
26. EXECUTION AND EFFECTIVE DATE. This Agreement is executed by each party
on the dates indicated below. Dealer acknowledges that this Agreement
is effective only on the date accepted by Rockford at its headquarters
in Arizona.
Executed on ____________ , 19__ .
"Dealer"
_________________________________
Entity Name
Type:____________________________
(Sole Proprietor, Partnership,
or Corporation)
State of Organization:___________
By_______________________________
Its:_____________________________
Address:_________________________
_________________________________
Accepted in Tempe, Arizona
on ____________ , 19__ .
"ROCKFORD"
Rockford Corporation, an Arizona corporation
By_______________________________
Its:_____________________________
Address:
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
-5-
