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                    FOURTH AMENDMENT TO FINANCING AGREEMENT

     THIS FOURTH AMENDMENT TO FINANCING AGREEMENT (this "Agreement") is made
this 23rd day of December, 1997, by and among POLK AUDIO, INC., a corporation
organized under the laws of the State of Maryland ("Polk Audio"), BRITANNIA
INVESTMENT CORP. (formerly known as POLK INVESTMENT CORP.), a corporation
organized under the laws of the State of Delaware ("Polk Investment"), POLK
INTERNATIONAL SALES CORPORATION, a corporation organized under the laws of the
United States Virgin Islands ("Polk International"), and POLK AUDIO EUROPE,
INC., a corporation organized under the laws of the State of Maryland ("Polk
Europe") (each, a "Borrower"); collectively, the "Borrowers") and NATIONSBANK,
N.A., a national banking association (the "Lender").

                                    RECITALS

     A.   The Borrowers and the Lender entered into a Financing Agreement dated
November 30, 1994, as modified by a First Amendment to Financing Agreement
dated October 15, 1995, a Second Amendment to Financing Agreement dated March
22, 1996 and a Third Amendment to Financing Agreement dated October 23, 1996
(the same, as amended, modified, substituted, extended, and renewed from time
to time, collectively, the "Financing Agreement"). Under the terms of the
Financing Agreement, the Lender provided the Revolving Loan (as that term is
defined in the Financing Agreement) in the maximum principal amount of
$6,500,000 (under which the Lender provides letters of credit not to exceed
$2,500,000, foreign exchange and interest rate contracts not to exceed $100,000
and revolving loans) and the Term Loan (as that term is defined in the
Financing Agreement) in the amount of $2,000,000.

     B.   The Borrowers have applied to the Lender for a temporary increase in
the maximum amount of the Revolving Credit Loans to $8,500,000.

     C.   The Lender has approved the Borrowers' application on the terms and
conditions set forth in this Agreement.

                                   AGREEMENTS

     NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Borrowers
and the Lender agree as follows:

     1.   The Borrowers and the Lender agree that the Recitals above are a part
of this Agreement. Unless otherwise expressly defined in this Agreement, terms
defined in the Financing Agreement shall have the same meaning under this
Agreement.

     2.   Section 1.1 of the Financing Agreement is modified by deleting the
definition of Revolving Credit Termination Date and inserting the following
definition in its place:

          "Revolving Credit Termination Date" means the earliest of (a) August



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     31, 1999, (b) the date on which the Revolving Credit Note matures (by
     acceleration or otherwise), or (c) the date on which the Lender's
     obligation to make advances under the Revolving Loan is terminated by the
     Lender following an Event of Default."

     3.   The Financing Agreement is hereby amended as follows:

          (a)  Section 2.2.1 of the Financing Agreement is amended in its
entirety as follows:

          "2.2.1 Subject to and upon the provisions of this Agreement, the
     Lender establishes a revolving credit facility in favor of the Borrowers
     (the "Revolving Loan"). The outstanding principal balance of the Revolving
     Loan shall at no time exceed a) $8,500,000 until June 30, 1998 at which
     time the maximum principal amount shall not exceed $6,500,000 minus b) the
     aggregate amount of all Obligations (fixed or contingent) with respect to
     Letter of Credit Agreements among the Lender and any one or more of the
     Borrowers minus c) the aggregate amount of all Obligations (fixed or
     contingent) with respect to Foreign Exchange/Swap Agreements among the
     Lender and any one or more of the Borrowers. The Lender's obligation to
     make advances under the Revolving Loan shall terminate on the Revolving
     Credit Termination Date, and following a Default or an Event of Default
     under this Agreement, may be limited, suspended or terminated at the
     Lender's sole and absolute discretion exercised from time to time."

          (b)  Section 5.2.4 of the Financing Agreement is deleted in its
entirety and the following section is inserted in its place:

          "Fixed Charge Coverage Ratio. The Borrowers will maintain, tested as
     of the last day of each of the Borrowers' fiscal quarters for the four (4)
     quarter period ending on that date, a Fixed Charge Coverage Ratio of not
     less than 1.5 to 1.0."

          (c)  As of the fiscal quarter ending March 1998, Section 5.2.2 of the
Financing Agreement is modified by changing the amount in subparagraph (a) to
"$15,000,000". Commencing with the test of the Tangible Net Worth covenant as
of March, 1998, the base amount of the Borrowers Tangible Net Worth shall be
$15,000,000.

     4.   The Borrowers' obligation to repay the advances of the Revolving Loan,
as increased under Section 1(a) above, shall be evidenced by a promissory note
dated the same date as this Agreement in substantially the form attached to this
Agreement as EXHIBIT A-2 and in the aggregate principal amount of $8,500,000
having a maturity date, repayment terms and interest rate as set forth in
EXHIBIT A-2, which promissory note shall be executed and delivered in
substitution for the Borrower's previous Revolving Credit Note. References in
the Financing Agreement and the other Financing Documents to the "Revolving
Credit Note" shall mean that substituted promissory note.

     5.   The Borrowers hereby issue, ratify and confirm the representations,
warranties and covenants contained in the Financing Agreement, as amended
hereby. The Borrowers agree


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that this Agreement is not intended to and shall not cause a novation with
respect to any or all of the Obligations.

     6. The Borrowers shall pay at the time this Agreement is executed and
delivered all fees, commissions, costs, charges, taxes and other expenses
incurred by the Lender and its counsel in connection with this Agreement,
including, but not limited to, reasonable fees and expenses of the Lender's
counsel and all recording fees, taxes and charges.

     7. This Agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall be deemed
to be an original and all taken together shall constitute but one and the same
instrument. The Borrowers agree that the Lender may rely on a telecopy of any
signature of any Borrowers. The Lender agrees that the Borrowers may rely on a
telecopy of this Agreement executed by the Lender.

     IN WITNESS WHEREOF, the Borrowers and the Lender have executed this
Agreement under seal as of the date and year first written above.


WITNESS OR ATTEST:                                POLK AUDIO, INC.

/s/ James M. Herd                    By: /s/ George M. Klopfer
--------------------------               ----------------------------- (SEAL)
                                         George M. Klopfer
                                         CEO


/s/ George M. Klopfer                By: /s/ James M. Herd
--------------------------               ----------------------------- (SEAL)
                                         Name:  James M. Herd  
                                         Title: President
 

WITNESS:                             BRITANNIA INVESTMENT CORP.
                                     (formerly known as POLK
                                     INVESTMENT CORP.)

/s/ James M. Herd                    By:  /s/ George M. Klopfer
--------------------------                ----------------------------- (SEAL)
                                          Name:  George M. Klopfer
                                          Title: CEO




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WITNESS:                            POLK INTERNATIONAL SALES CORPORATION

/s/ James M. Herd                   By: /s/ George Klopfer        (SEAL)
----------------------------           ---------------------------
                                       Name: George Klopfer
                                       Title: CEO


WITNESS:                            POLK AUDIO EUROPE, INC.

/s/ James M. Herd                   By: /s/ George Klopfer        (SEAL)
-----------------------------          ---------------------------
                                       Name: George Klopfer 
                                       Title: CEO



WITNESS:                            NATIONSBANK, N.A.

/s/ Deborah Floyd                   By: /s/ Thomas O. Holland     (SEAL)
-----------------------------          ---------------------------
                                       Thomas O. Holland
                                       Vice President



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