Exhibit 10.6

EXECUTION COPY

AMENDMENT NO. 12 TO THE LOAN AGREEMENT

                     THIS AMENDMENT NO. 12 TO THE LOAN AGREEMENT is made as of
October 4, 2002 (this “Agreement”) by and among RECOTON CORPORATION, a New York
corporation (“Recoton”), INTERACT ACCESSORIES, INC., a Delaware corporation
(“InterAct”), RECOTON AUDIO CORPORATION, a Delaware corporation (“Audio”), AAMP
OF FLORIDA, INC., a Florida corporation (“AAMP”), RECOTON HOME AUDIO, INC., a
California corporation (“RHAI”), RECOTON ACCESSORIES, INC., a Delaware
corporation (“Recoton Accessories”) and RECOTON MOBILE ELECTRONICS, INC., a
Delaware corporation (“Mobile Electronics”) and together with Recoton, InterAct,
Audio, AAMP, RHAI and Recoton Accessories collectively, the “Borrowers”, the
Guarantors (the Borrowers and the Guarantors are sometimes collectively referred
to herein as the “Loan Parties”), the Lenders, HELLER FINANCIAL, INC., a
Delaware corporation, for itself as a Lender and as Administrative Agent and
Senior agent and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
for itself as a Lender and as Collateral Agent and Syndication Agent (the
Administrative Agent, Senior Agent, Collateral Agent and Syndication Agent are
sometimes referred to herein as the “Agents”) and is made with reference to the
Loan agreement dated as of October 31, 2000 (as amended by the (i) Consent and
Amendment No. 1 to the Credit Agreement and Amendment No. 1 to the Security
Agreement, dated as of February 7, 2001, (ii) Amendment No. 2 to the Credit
Agreement, dated as of May 10, 2001, (iii) Consent and Amendment No. 3 to the
Loan Agreement, Amendment No. 2 to the Security agreement and Amendment No. 1 to
the Pledge Agreement, dated as of July 3, 2001, (iv) Fourth Amendment to Loan
Agreement, dated as of February 26, 2002, (v) Waiver, Consent and Amendment No.
5 to the Loan Agreement, dated as of March 29, 2002, (vi) Waiver and Amendment
No. 6, dated as of August 28, 2002, (vii) Amendment No. 7 to the Loan Agreement,
dated as of September 13, 2002, (viii) Amendment No. 8 to the Loan Agreement
dated as of September 18, 2002, (ix) Amendment No. 9 to the Loan Agreement dated
as of September 20, 2002, (x) Amendment No. 10 to the Loan Agreement dated as of
September 23, 2002 and (xi) Amendment No.11 to the Loan Agreement, Amendment No.
3 to the Security Agreement and Amendment No. 2 to the Pledge Agreement dated as
of September 25, 2002 (“Amendment No. 11”), as the same may be further amended,
supplemented, restated or otherwise modified from time to time, the “Loan
Agreement”), among the Borrowers, the Guarantors, the Lenders and the Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Loan Agreement as amended hereby.

R E C I T A L S

                      WHEREAS, the Borrowers, the Guarantors, the Lenders and
the Agents have entered into the Loan Agreement;

                      WHEREAS, the Lenders have made Loans to the Borrowers
pursuant to the terms of the Loan Agreement;

                      WHEREAS, the Borrowers expressly reaffirm all of the Loan
Documents and the debt and other obligations thereunder, the Borrowers agree
that nothing contained herein shall operate to release the Borrowers or any
other person or persons from their liability to keep and perform the provisions,
conditions, obligations, and agreements contained in the Loan Documents, except
as may be herein modified, and the Borrowers hereby reaffirm that each and every
provision, condition, obligation and agreement in such documents shall continue
in full force and effect, except as may be herein modified;

                      WHEREAS, the validity, priority and perfection of all
mortgages, security interests and other liens granted or created by the Loan
Documents is hereby acknowledged and confirmed by the Borrowers, and the
Borrowers agree that such documents shall continue to secure the Loans and the
other Obligations, as may be amended by this Agreement, without any change, loss
or impairment of the priority of such mortgages, security interests or other
liens;

                     WHEREAS, the Borrowers have requested that the Lenders
agree to amend certain provisions of the Loan Agreement;

                      WHEREAS, subject to the terms and conditions of this
Agreement, the Lenders have agreed to amend certain provisions of the Loan
Agreement as specifically set forth herein;

                      WHEREAS, the Borrowers have failed to cause that certain
Irrevocable Letter of Credit No. MAI91373 issued by Commerzbank AG, Filale Mainz
to be amended as required by Section 7(g) of Amendment No. 11 (the “German LC
Covenant”) on or before September 30, 2002 ;

                      WHEREAS, the Borrowers have requested that the Lenders
waive the Borrowers’ failure to timely comply with the German LC Covenant (the
“German LC Covenant Violation”);

                      WHEREAS, subject to the terms and conditions of this
Agreement, the Lenders have agreed to waive the German LC Covenant Violation;

                      WHEREAS, the Borrowers have requested that the Lenders
consent to the assignment by Recoton of its "Loudspeaker With Acoustic Band-Pass
Filter" patent, U.S. Patent No. 4875546 (the "Patent Sale"); and

                      WHEREAS, subject to the terms and conditions of this
Agreement, the Lenders hereby consent to the consummation of the Patent Sale and
hereby waive any non-compliance with Section 7.3 of the Loan Agreement with
respect to such transaction;

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

                      Section 1. Certain Amendments to the Loan Agreement.
Subject to the satisfaction of each of the conditions set forth in Section 5 of
this Agreement, as of the Effective Date (as defined herein) the Loan Agreement
is hereby amended as follows:

                                 (a) The first two sentences of the first
paragraph of Section 2.1(B) of the Loan Agreement are hereby amended and
restated in their entirety as follows:

  “Each Revolving Loan Lender severally agrees to lend to the Borrowers from
time to time its Pro Rata Share of each Revolving Advance. The aggregate amount
of all Revolving Loan Commitments shall not exceed (i) $160,000,000 during the
period beginning on October 4, 2002 and ending on the earlier to occur of the
date on which the German LC is drawn and October 15, 2002, (ii) $144,000,000
from and after such date until October 31, 2002 and (iii) $130,000,000 from and
after October 31, 2002, in each case as such amount may be reduced from time to
time pursuant to subsections 2.4(B)(5), 2.4(B)(6) or 2.4(C).”  

                                 (b) Clause (b) of Section 2.1(B)(2) of the Loan
Agreement is hereby amended and restated in its entirety as follows:

  “(b) up to the lesser of (i) 70% of Eligible Inventory, which percentage shall
be permanently reduced by 1% on October 31, 2002 and on each Thursday thereafter
until such percentage is reduced to 65% and (ii) (A) 100% of the Appraised Value
of Eligible Inventory for the period beginning October 4, 2002 and ending
November 30, 2002, and (B) 85% of the Appraised Value of Eligible Inventory at
all times after November 30, 2002;"  

                                 (c) Clause (e) of Section 2.1(B)(2) of the Loan
Agreement is hereby amended and restated in its entirety as follows:

  “(e) 100% of the undrawn portion of the letter of credit, if any, provided by
Recoton Germany as set forth in Section 5.12 (the “German LC”),”  

                                 (d) Section 11.1 of the Loan Agreement is
amended to delete in its entirety the definition of “Permitted Overadvance” and
to replace such definition with the following definition:

  "`Permitted Overadvance' means an overadvance of an amount equal to
$15,250,000 plus the amount of any withholding tax paid by the Administrative
Agent with respect to amounts drawn under the German LC, up to a maximum amount
of $750,000, which amount of overadvance shall be permanently reduced to zero on
October 31, 2002."  

                                 (e) Section 11.1 of the Loan Agreement is
amended to add in the appropriate alphabetical order the following definition:

  “‘German LC’ has the meaning assigned to it in Section 2.1(B)(2).”  

                      Section 2. Consent and Waiver; Authority to Release Liens.

                                 (a) Subject to the satisfaction of the
conditions set forth in Section 5 of this Agreement, and subject to the
provisions of Section 3 hereof regarding the application of the proceeds
thereof, the Lenders hereby consent to Recoton’s consummation of the Patent Sale
pursuant to the terms and conditions of an Assignment Agreement (the “Assignment
Agreement”) between Recoton and Logitech, Inc. (the “Assignee”), substantially
in the form attached hereto as Exhibit A, and waive any noncompliance by the
Borrowers with Section 7.3(A) of the Loan Agreement with respect to such
transaction.

                                 (b) Subject to the satisfaction of the
conditions set forth in Section 5 of this Agreement, the Lenders hereby
irrevocably authorize the Senior Agent and Collateral Agent (i) to release its
Liens on all of the “Released Collateral”, as such term is defined in the form
of Release of Security Interest (Patent) attached hereto as Exhibit B, to the
extent conveyed to the Assignee pursuant to the terms of the Assignment
Agreement and to the extent constituting Collateral under the Security Documents
and (ii) to execute and deliver such agreements, documents and instruments as
may be requested by the Borrowers and prepared at the Borrowers’ sole expense in
form and substance acceptable to the Senior Agent and Collateral Agent, to
evidence the Lien release described in clause (i) above, including, without
limitation, UCC Termination Statements, UCC Partial Release Statements, and UCC
Statements of Amendment, and releases and assignments with respect to
intellectual property security interests filed with the United States Patent and
Trademark Office, it being understood and agreed that to the extent any such
documents are to be recorded publicly such recordation shall be the sole and
exclusive responsibility of the Borrowers and shall be made at the Borrowers’
sole expense; provided, however, that such releases shall specifically exclude,
and the Loan Parties hereby reaffirm, the Senior Agent’s and Collateral Agent’s
Liens under the Security Documents on all proceeds of the Released Collateral
conveyed under and pursuant to the Assignment Agreement to the extent payable to
or for the account of Recoton, all of the Recoton’s claims, rights and interests
in, to and under the Assignment Agreement, and all property of the Loan Parties
expressly excluded from the conveyances contemplated by the Assignment
Agreement.

                                 (c) Subject to the conditions set forth in
Section 5 hereof, the Lenders hereby waive the German LC Covenant Violation;
provided, however, that such waiver is only effective if such covenant is
complied with by the Borrowers on or before [October 15, 2002].

                      Section 3. Application of Proceeds. Upon receipt by
Recoton of each payment (including each royalty payment) from the Assignee
pursuant to or in connection with the Assignment Agreement, the Borrowers shall
immediately pay to the Administrative Agent an amount equal to such payment
received from the Assignee (each such amount being a “Received Amount”). If the
initial Received Amount is in excess of $170,000, the Administrative Agent shall
apply the first $100,000 of the initial Received Amount to the payment of the
Revolving Loan without reducing the Revolving Loan Commitment. The
Administrative Agent shall apply the remainder of the initial Received Amount
(provided that if the initial Received Amount is less than or equal to $170,000,
the remainder shall be the entire initial Received Amount) and each other
Received Amount first, to the payment of Scheduled Installments of Term Loan B,
then, to the payment of Scheduled Installments of Term Loan A, and then to the
payments of Scheduled Installments of Term Loan C, each in the inverse order of
maturity, and then to the payment of the Revolving Loan without reducing the
Revolving Loan Commitment.

                      Section 4. Representations and Warranties. The Loan
Parties hereby represent and warrant to each Agent and each Lender that after
giving effect to this Agreement:

                                 (a) no Default or Event of Default has occurred
and is continuing on and as of the date hereof;

                                 (b) the representations and warranties of the
Loan Parties and the other Loan Parties contained in the Loan Agreement and the
other Loan Documents are true and correct on and as of the date hereof as if
made on and as of the date hereof, except to the extent such representations and
warranties expressly relate to a different date; and

                                 (c) the execution and delivery by the Loan
Parties to this Agreement and the performance by the Loan Parties of all of
their respective agreements and obligations under this Agreement and the Loan
Agreement as amended hereby, respectively, are within the power and authority of
the Loan Parties and have been duly authorized by all necessary action on the
part of the Loan Parties, and that the execution and delivery by the Loan
Parties, of this Agreement and the performance by each of the transactions
contemplated hereby will not contravene any term or condition set forth in any
material agreement or instrument to which each is a party or by which each is
bound.

                      Section 5. Effectiveness and Conditions Precedent. This
Agreement shall become effective on October 4, 2002 (the “Effective Date”), upon
the Administrative Agent’s receipt of counterparts of this Agreement executed
and delivered by each of the Lenders (other than the Term Loan C Lenders), the
Borrowers and the Guarantors (which executions and deliveries may be effected by
delivery and receipt by facsimile transmission).

                      Section 6. Status of Loan Documents; Additional
Representations and Warranties.

                                 (a) This Agreement is limited solely for the
purposes and to the extent expressly set forth herein, and, except as expressly
provided hereby, (i) the terms, provisions and conditions of the Loan Documents
and (ii) the Liens granted under the Loan Documents shall continue in full force
and effect and are hereby ratified and confirmed in all respects.

                                 (b) No waiver or amendment of any terms or
provisions of the Loan Agreement made hereunder shall relieve the Loan Parties
from complying with any other term or provision of the Loan Agreement or any
other Loan Document.

                                 (c) No action taken by any Lender, the
Administrative Agent or the Collateral Agent prior to, on or after the date
hereof shall constitute a waiver of or modification of any term or condition of
any of the Loan Documents, except as specifically set forth herein, or prejudice
any rights which the Administrative Agent, the Collateral Agent or any of the
Lenders may now have as of the date hereof or may have in the future under or in
connection with the Loan Documents, including without limitation all rights and
remedies in connection with Defaults, Events of Default and failures of
conditions precedent to the making of Loans and the issuance of Lender Letters
of Credit that have occurred and are continuing, all of which rights and
remedies each Lender, the Administrative Agent and the Collateral Agent hereby
expressly reserve.

                                 (d) The Loan Parties represent and warrant to
each of the other parties hereto that except as heretofore disclosed in writing
by the Loan Parties to the Lenders, as of the date hereof, there is no pending
or, to the knowledge of the Loan Parties, threatened action, suit, proceeding,
governmental investigation or arbitration against or affecting any of the Loan
Parties or any property of any of the Loan Parties that is likely to have a
Material Adverse Effect.

                      Section 7. Lenders’ Consent to Term Loan D. The Lenders
agree to permit the making by one or more Lenders of an additional loan
substantially in accordance with the terms set forth in Exhibit C attached
hereto, subject to written approval by the Lenders (other than the Term Loan C
Lenders) of the definitive terms of the amendment to the Loan Agreement
contemplated in such Exhibit.

                      Section 8. German LC Draw. As soon as practicable
following the Borrowers’ compliance with the German LC covenant, the
Administrative Agent shall prepare a draw certificate for the full amount of the
German LC.

                      Section 9. Miscellaneous.

                                 (a) No Waiver, Cumulative Remedies. No failure
or delay or course of dealing on the part of any Agent or any Lender in
exercising any right, power or privilege hereunder shall operate as an express
or implied waiver thereof, nor shall any single or partial exercise of any such
right, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. The rights, powers
and remedies herein expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Lenders would otherwise have. No notice to
or demand on the Borrowers or Guarantors in any case shall entitle the Borrowers
or Guarantors to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Lenders to any other
or further action in any circumstances without notice or demand.

                                 (b) Ratification, Etc. Except as expressly
provided for herein, the Loan Agreement and all documents, instruments and
agreements related thereto, including but not limited to, the Security
Documents, are hereby ratified and confirmed in all respects and shall continue
in full force and effect. Without limiting the generality of the foregoing, each
of the Loan Parties and each of the Lenders party hereto ratify and confirm the
effectiveness, validity, and enforceability of each of the amendments to the
Loan Agreement entered into by the Borrowers and the Lenders or the Requisite
Lenders and each of the amendments to the Security Agreement and Pledge
Agreement entered into by the Loan Parties and the Senior Agent. The Loan
Agreement and this Agreement shall be read and construed as a single agreement.
This Agreement shall constitute one of the Loan Documents and the obligations of
the Borrowers and Guarantors under this Agreement shall constitute Obligations
for all purposes of the Loan Documents. All references in the Loan Agreement,
the Loan Documents or any related agreement or instrument to the Loan Agreement
shall hereafter refer to the Loan Agreement as amended hereby.

                                 (c) Expenses. The Borrowers agree to pay and
reimburse the Administrative Agent and Lenders for all of their costs and
expenses (including, without limitation, costs and expenses of legal counsel and
Richter Consulting, Inc.) in connection with this Agreement.

                                 (d) Bankruptcy; Insolvency. The Borrowers
represent and warrant that, on and as of the date hereof, no proceeding has been
filed or commenced by or against the Borrowers for dissolution or liquidation,
or by or against the Borrowers voluntarily or involuntarily terminating or
dissolving or being terminated or dissolved; nor does there exist insolvency of
the Borrowers, nor do the Borrowers fail to pay their debts as they become due
in the ordinary course of business; nor has a creditor’s committee been
appointed for the business of the Borrowers; nor have the Borrowers made an
assignment for the benefit of creditors, or filed a petition in bankruptcy or
for reorganization or to effect a plan of arrangement with creditors; nor have
the Borrowers applied for or permitted the appointment of a receiver or trustee
for any or all of their property, assets or rights; nor are the Borrowers aware
of any such receiver or trustee being appointed for any or all of their
property, assets or rights; nor has any of the above actions or proceedings
whatsoever been commenced by or against any other party liable for the
Obligations.

                                 (e) Headings Descriptive. The headings of the
several Sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision.

                                 (f) Severability. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

                                 (g) Counterparts. This Agreement may be
executed and delivered in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument. A complete set of counterparts shall be lodged with
each of Recoton and the Administrative Agent.

                      Section 10. Release. The Borrowers and each of the
Guarantors hereby acknowledges and confirms that (i) it does not have any
grounds, and hereby agrees not to challenge (or to allege or to pursue any
matter, cause or claim arising under or with respect to), in any case based upon
acts or omissions of any of the Agents or Lenders occurring prior to the date
hereof or facts otherwise known to it as of the date hereof, the effectiveness,
genuineness, validity, collectibility or enforceability of the Loan Agreement or
any of the other Loan Documents, the Obligations, the Liens securing such
Obligations, or any of the terms or conditions of any Loan Document (it being
understood that such acknowledgement and confirmation does not preclude the
Borrowers or the Guarantors from challenging the Agents’ or any Bank’s
interpretation of any term or provision of the Loan Agreement or other Loan
Document) and (ii) it does not possess (and hereby forever waives, remises,
releases, discharges and holds harmless the Agents, the Lenders, and their
respective affiliates, stockholders, directors, officers, employees, attorneys,
agents and representatives and each of their respective heirs, executors,
administrators, successors and assigns (collectively, the “Indemnified Parties”)
from and against, and agrees not to allege or pursue) any action, cause of
action, suit, debt, claim, counterclaim, cross-claim, demand, defense, offset,
opposition, demand and other right of action whatsoever, whether in law, equity
or otherwise (which it, all those claiming by, through or under it, or its
successors or assigns, have or may have) against the Indemnified Parties, or any
of them, by reason of, any matter, cause or thing whatsoever, with respect to
events or omissions occurring or arising on or prior to the date hereof and
relating to the Loan Agreement or any of the other Loan Documents (including,
without limitation, with respect to the payment, performance, validity or
enforceability of the Obligations, the Liens securing the Obligations or any or
all of the terms or conditions of any Loan Document) or any transaction relating
thereto; provided, however, that no Borrower nor Guarantor hereby releases or
holds harmless any Indemnified Party for actions or omissions by any such
Indemnified Party constituting, or losses or expenses directly resulting from,
the gross negligence or willful misconduct of such Indemnified Party as
determined by a final judgment of a court of competent jurisdiction.

                      Section 11. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

                      IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective duly authorized
officers as of the date first written above.

BORROWERS: RECOTON CORPORATION

By: /s/ Arnold Kezsbom                                                       
Name: Arnold Kezsbom
Title:   Executive Vice President - Finance

INTERACT ACCESSORIES, INC.
RECOTON AUDIO CORPORATION
AAMP OF FLORIDA, INC.
RECOTON HOME AUDIO, INC.
RECOTON ACCESSORIES, INC.
RECOTON MOBILE ELECTRONICS, INC.

By: /s/ Arnold Kezsbom                                                       
Name: Arnold Kezsbom
Title:   Vice President

GUARANTORS: CHRISTIE DESIGN CORPORATION
RECOTON INTERNATIONAL HOLDINGS, INC.
RECOTON JAPAN, INC.
RECONE, INC.
RECOTON CANADA LTD.
INTERACT CANADA, LTD.
INTERACT INTERNATIONAL, INC.
INTERACT HOLDINGS, INC.
INTERACT TECHNOLOGIES, INC.

By: /s/ Arnold Kezsbom                                                       
Name: Arnold Kezsbom
Title:   Vice President

LENDERS: HELLER FINANCIAL, INC.,
individually and as Senior Agent and
Administrative Agent

By: /s/ Hugh Wilder                                                       
Name: Hugh Wilder
Title:   Senior Vice President

  GENERAL ELECTRIC CAPITAL CORPORATION,
individually and as Collateral Agent and
Syndication Agent

By: /s/ Hugh Wilder                                                       
Name: Hugh Wilder
Title:   Authorized Signatory

  BANK OF AMERICA, N.A.

By: /s/ Valerie Peppe                                                       
Name: Valerie Peppe
Title:   Assistant Vice President

  THE CIT GROUP / BUSINESS CREDIT, INC.

By: /s/ Vincent Belcastro                                                       
Name: Vincent Belcastro
Title:   Vice President

  GUARANTY BUSINESS CREDIT CORPORATION

By: /s/ James E. Casper                                                       
Name: James E. Casper
Title:   Senior Vice President

  FOOTHILL CAPITAL CORPORATION

By: /s/ Robert J. Cambora                                                       
Name: Robert J. Cambora
Title:   Senior Vice President

  CITIZENS BUSINESS CREDIT

By: /s/ Thomas D. Opie                                                       
Name: Thomas D. Opie
Title:   Vice President

  WASHINGTON MUTUAL BANK

By: /s/ Terri K. Lins                                                       
Name: Terri K. Lins
Title:   Vice President

  SIEMENS FINANCIAL SERVICES, INC.

By: /s/ Frank Amodio                                                       
Name: Frank Amodio
Title:   Vice President - Credit

  GMAC BUSINESS CREDIT LLC

By: /s/ Alexander J. Chobot                                            
          
Name: Alexander J. Chobot
Title:   Vice President

  U.S. BANK BUSINESS CREDIT

By: /s/ Suzanne Geiger                                                       
Name: Suzanne Geiger
Title:   Senior Vice President

EXHIBIT A

Assignment Agreement

[Attached]

EXHIBIT B

Release of Security Interest (Patent)

[Attached]

EXHIBIT C

Terms of Term Loan D

[Attached]

EXHIBIT C TO AMENDMENT NO. 12
TO THE LOAN AGREEMENT

Summary of Proposed Terms and Conditions of
$15,000,000 Tranche D Term Loan
to
AAMP of Florida, Inc.
as an
Amendment
to the
Recoton Corporation
Loan Agreement dated as October 31, 2000,
as previously amended

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The Loan Agreement would be modified pursuant to an amendment agreement
substantially on the terms and conditions described below; all references herein
to the “closing” shall mean and refer to the consummation and effectiveness of
such amendment. All other terms and conditions of the Loan Agreement and related
Loan Documents will remain unchanged and shall be ratified and confirmed. This
term sheet is a summary of terms only and is not a commitment of any lender to
provide the proposed financing, which commitments may only be established
through later subsequent legal documentation approved in writing and executed by
all of the Lenders (other than the Term Loan C Lenders) and by the lenders which
ultimately agree to provide the Term Loan D described below.

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Bank Group would authorize the making of Term Loan D in the aggregate principal
amount of $15MM to AAMP of Florida, Inc. ("AAMP") by GE Capital/Heller and
possibly one or more of the other existing lenders (collectively, the "Term D
Lenders").

Term Loan D would mature with a balloon payment on January 25, 2003, and have an
interest rate of Prime + 3, payable monthly in arrears.

The proceeds of Term Loan D would be used as follows:

   $1MM fee to Term D Lenders; and
$14MM as a payment to the Revolving Loan, which will be a permanent reduction.

The payment to the Revolving Loan would be first allocated to the availability
generated by the AAMP current assets in the existing Borrowing Base, and
secondly to the current outstanding Permitted Overadvance.

Term Loan D would have a first security position on any and all of the AAMP
assets and capital stock, and a second behind the Lenders other than the Term D
Lenders (hereafter, the “Senior Bank Group”), including Term Loan C, on all of
assets and capital stock of Recoton and its other Subsidiaries. The Senior Bank
Group would retain a second position on the AAMP assets and capital stock. Term
Loan D would constitute “Senior Debt” for purposes of both tranches of Recoton’s
existing subordinated indebtedness.

At the close of Term Loan D, the Senior Bank Group would agree to reduce the
Required Minimum Excess Availability amount to zero (subject to the succeeding
paragraphs). Also, the Senior Bank Group would agree that the future changes to
the Required Minimum Excess Availability balance after the closing Term Loan D
will be governed by Requisite Lenders.

Any Overadvance outstanding after the application of Term Loan D and the
reduction of the Required Minimum Excess Availability to zero must be repaid at
the close of Term Loan D. However, the Required Minimum Excess Availability
would be increased to $6MM upon the earlier of the sale of AAMP and 11/30/02.

The inventory advance rate would remain 70% until 10/31/02, at which time it
would be reduced by 1% per week until it reaches 65%. This reduction would
continue until the completion of the AAMP sale, at which time the advance rate
would reduce immediately to 65%.

Term Loan D would have no voting rights under the Loan Agreement (other than
with respect to payment and bankruptcy defaults and other matters directly
affecting Term Loan D), and the Senior Bank Group would not be able to prevent
the Term D Lenders from taking any action in respect to the AAMP assets upon any
default with respect to Term Loan D.

Upon the closing of the sale of AAMP the net proceeds would initially be applied
to the repayment in full of Term Loan D, and any proceeds above and beyond the
repayment in full of Term Loan D would be applied in the following order:

           1. If such excess proceeds are equal to or greater than $7MM:

   a) 15% of the proceeds would be allowed to remain in the Company for general
working capital purposes.

   b) 85% of the proceeds would be provided to the Senior Bank Group for
application:

   1) To the Revolving Loan in order to re-establish the $6MM level of the
Required Minimum Excess Availability, and to effectuate a 65% advance rate on
the Inventory, then,

   2) As a permanent paydown to the Revolving Loan; and

           2. If such excess proceeds are less than $7MM:

   a) the first proceeds would be provided to the Senior Bank Group for
application to the Revolving Loan in order to re-establish the $6MM level of the
Required Minimum Excess Availability and to effectuate a 65% advance rate on the
Inventory, then

   b) any remaining proceeds would be applied:

   1) 15% would be allowed to remain in the Company for general working capital
purposes.

   2) 85% would be applied as a permanent paydown to the Revolving Loan.

The current Permitted Overadvance would remain at $15,250,000 until the calling
of the German L/C. Upon the receipt of the proceeds of the German L/C, the
Permitted Overadvance would increase to $16MM and the net proceeds of the German
L/C will be used as a permanent paydown on the Revolving Loan.

* * * *