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                             REVOLVING CREDIT NOTE

$8,500,000
                                                             Baltimore, Maryland
                                                               December 25, 1997

     FOR VALUE RECEIVED, POLK AUDIO, INC., a corporation organized under the
laws of the State of Maryland, BRITANNIA INVESTMENT CORP. (formerly known as
POLK INVESTMENT CORP.), a corporation organized under the laws of the State of
Delaware, POLK INTERNATIONAL SALES CORPORATION, a corporation organized under
the laws of the United States Virgin Islands, and POLK AUDIO EUROPE, INC., a
corporation organized under the laws of the State of Maryland (collectively,
the "Borrowers"), jointly and severally, promise to pay to the order of
NATIONSBANK, N.A., a national banking association (the "Lender"), the principal
sum of EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS ($8,500,000) (the "Principal
Sum"), or so much thereof as has been or may be advanced/readvanced to or for
the account of the Borrowers pursuant to the terms and conditions of the
Financing Agreement (as hereinafter defined), together with interest thereon at
the rate or rates hereinafter provided, in accordance with the following:

     1. Interest.

          (a) As used in this Note "Applicable Interest Rate" means the LIBOR
Floating Rate (as that term is defined in the Financing Agreement). The
Applicable Interest Rate shall be determined in the manner provided in the
Financing Agreement.

          (b) Commencing as of the date hereof and continuing until repayment in
full of all sums due hereunder, the unpaid Principal Sum shall bear interest at
the Applicable Interest Rate.
    
     2. Payments and Maturity.

     The unpaid Principal Sum, together with interest thereon at the rate or
rates provided above, shall be payable as follows:


          (a) Interest only on the unpaid Principal Sum shall be paid at the
times and in the manner set forth in the Financing Agreement.

          (b) Unless sooner paid, the unpaid Principal Sum, together with
interest accrued and unpaid thereon, shall be due and payable in full on August
31, 1999.

     The fact that the balance hereunder may be reduced to zero from time to
time pursuant to the Financing Agreement will not affect the continuing
validity of this Note or the Financing Agreement, and the balance may be
increased by the Borrower to the Principal Sum after any such reduction to zero.


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     3. Default Interest.

     Upon the occurrence of an Event of Default (as hereinafter defined), the
unpaid Principal Sum shall bear interest thereafter at a rate two percent (2%)
per annum in excess of Applicable Interest Rate until such Event of Default is
waived or cured.

     4. Late Charges.

     If the Borrowers shall fail to make any payment under the terms of this
Note within fifteen (15) days after the date such payment is due, the Borrowers
shall pay to the Lender on demand a late charge equal to five percent (5%) of
such payment.

     5. Application and Place of Payments.

     All payments, made on account of this Note shall be applied first to the
payment of any late charge then due hereunder, second to the payment of any
prepayment fee then due hereunder, third to the payment of accrued and unpaid
interest then due hereunder, and the remainder, if any, shall be applied to the
unpaid Principal Sum. All payments on account of this Note shall be paid in
lawful money of the United States of America in immediately available funds
during regular business hours of the Lender at its principal office in
Baltimore, Maryland or at such other times and places as the Lender may at any
time and from time to time designate in writing to the Borrowers.

     6. Prepayment.

     The Borrowers shall make mandatory prepayments as required pursuant to
Section 2.2.7 of the Financing Agreement and may make such other prepayments of
the Principal Sum upon the terms and conditions set forth in the Financing
Agreement.

     7. Financing Agreement and Other Financing Documents.

     This Note is the "Revolving Credit Note" described in the Fourth Amendment
to Financing Agreement dated the same date as this Note, which amends the
Financing Agreement dated November 30, 1994 (as amended by a First Amendment to
Financing Agreement dated October 15, 1995, a Second Amendment dated March __,
1996, a Third Amendment to Financing Agreement dated October 23, 1996 and as
amended, modified, restated, substituted, extended and renewed at any time and
from time to time, the "Financing Agreement") among the Borrowers and the
Lender and is one of the "Financing Documents" (as that term is defined in the
Financing Agreement). The indebtedness evidenced by this Note is included
within the meaning of the term "Obligations" as defined in the Financing
Agreement.

     8. Remedies.

     Upon the occurrence of an Event of Default (as that term is defined in the
Financing Agreement), at the option of the Lender, all amounts payable by the
Borrowers to the Lender under the terms of this Note shall immediately become
due and payable by the Borrowers to the Lender without notice to the Borrowers
or any other person, and the Lender shall have all of the rights, powers, and
remedies available under the terms of this Note, any of the other Financing



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Documents and all applicable laws. The Borrowers and all endorsers, guarantors,
and other parties who may now or in the future be primarily or secondarily
liable for the payment of the indebtedness evidenced by this Note hereby
severally waive presentment, protest and demand, notice of protest, notice of
demand and of dishonor and non-payment of this Note and expressly agree that
this Note or any payment hereunder may be extended from time to time without in
any way affecting the liability of the Borrowers, guarantors and endorsers.

     9. Confessed Judgment

     Upon the occurrence of an Event of Default, each of the Borrowers hereby
authorizes any attorney designated by the Lender or any clerk of any court of
record to appear for the Borrowers in any court of record and confess judgment
without prior hearing against each of the Borrowers in favor of the Lender for
and in the amount of the unpaid Principal Sum, all interest accrued and unpaid
thereon, all other amounts payable by the Borrowers to the Lender under the
terms of this Note or any of the other Financing Documents, costs of suit, and
attorneys' fees of fifteen percent (15%) of the unpaid Principal Sum and
interest then due hereunder. Each of the Borrowers hereby releases, to the
extent permitted by applicable law, all errors and all rights of exemption,
appeal, stay of execution, inquisition, and other rights to which the Borrowers,
or either of them, may otherwise be entitled under the laws of the United States
of America or of any state or possession of the United States of America now in
force and which may hereafter be enacted. The authority and power to appear for
and enter judgment against the Borrowers shall not be exhausted by one or more
exercises thereof or by any imperfect exercise thereof and shall not be
extinguished by any judgment entered pursuant thereto. Such authority may be
exercised on one or more occasions or from time to time in the same or different
jurisdictions as often as the Lender shall deem necessary or desirable, for all
of which this Note shall be a sufficient warrant.

     10. Expenses.

     The Borrowers, jointly and severally, promise to pay to the Lender on
demand by the Lender all costs and expenses incurred by the Lender in connection
with the collection and enforcement of this Note, including, without limitation,
reasonable attorneys' fees and expenses and all court costs.

     11. Notices.

     Any notice, request, or demand to or upon the Borrowers or the Lender shall
be deemed to have been properly given or made when delivered in accordance with
the manner provided in the Financing Agreement for the giving of notices.

     12. Miscellaneous.

     Each right, power, and remedy of the Lender as provided for in this Note or
any of the other Financing Documents, or now or hereafter existing under any
applicable law or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power, or remedy provided for in this Note or any
of the other Financing Documents or now or hereafter existing under any
applicable law, and the exercise or beginning of the exercise by the Lender of
any one or more of such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all such other rights,
powers or remedies. No failure or delay




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by the Lender to insist upon the strict performance of any term, condition,
covenant, or agreement of this Note or any of the other Financing Documents, or
to exercise any right, power, or remedy consequent upon a breach thereof, shall
constitute a waiver of any such term, condition, covenant, or agreement or of
any such breach, or preclude the Lender from exercising any such right, power,
or remedy at a later time or times. By accepting payment after the due date of
any amount payable under the terms of this Note, the Lender shall not be deemed
to waive the right either to require prompt payment when due of all other
amounts payable under the terms of this Note or to declare an Event of Default
for the failure to effect such prompt payment of any such other amount. No
course of dealing or conduct shall be effective to amend, modify, waive,
release, or change any provisions of this Note.

            13. Partial Invalidity.

            In the event any provision of this Note (or any part of any
provision) is held by a court of competent jurisdiction to be invalid, illegal,
or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision (or remaining part of the
affected provision) of this Note; but this Note shall be construed as if such
invalid, illegal, or unenforceable provision (or part thereof) had not been
contained in this Note, but only to the extent it is invalid, illegal, or
unenforceable.

            14. Captions.

            The captions herein set forth are for convenience only and shall
not be deemed to define, limit, or describe the scope or intent of this Note.

            15. Applicable Law.

            Each of the Borrowers acknowledges and agrees that this Note shall
be governed by the laws of the State of Maryland, even though for the
convenience and at the request of the Borrowers, this Note may be executed
elsewhere.

            16. Consent to Jurisdiction.

            Each of the Borrowers irrevocably submits to the jurisdiction of
any state or federal court sitting in the State of Maryland over any suit,
action, or proceeding arising out of or relating to this Note. Each of the
Borrowers irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of venue of any such
suit, action, or proceeding brought in any such court and any claim that any
such suit, action, or proceeding brought in any such court has been brought in
an inconvenient forum. Final judgment in any such suit, action, or proceeding
brought in any such court shall be conclusive and binding upon the Borrowers
and may be enforced in any court in which the Borrowers are subject to
jurisdiction by a suit upon such judgment provided that service of process is
effected upon the Borrowers as provided in this Note or as otherwise permitted
by applicable law.

            17. Service of Process.

            Each of the Borrowers hereby consents to process being served in
any suit, action, or proceeding instituted in connection with this Note by (a)
the mailing of a copy thereof by


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certified mail, postage prepaid, return receipt requested, to the Borrowers and
(b) serving a copy thereof upon Wilbert H. Sirota, Esq., c/o Piper & Marbury, 36
South Charles Street, Baltimore, Maryland 21201 the agent hereby designated/the
agent hereinabove designated and appointed by the Borrowers as the Borrowers'
agent for service of process. The Borrowers irrevocably agree that such service
shall be deemed in every respect effective service of process upon the Borrowers
in any such suit, action or proceeding, and shall, to the fullest extent
permitted by law, be taken and held to be valid personal service upon the
Borrowers. Nothing in this Section shall affect the right of the Lender to serve
process in any manner otherwise permitted by law or limit the right of the
Lender otherwise to bring proceedings against the Borrowers in the courts of any
jurisdiction or jurisdictions.


    18.  WAIVER OF TRIAL BY JURY.

    EACH OF THE BORROWERS HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH THE BORROWERS, OR EITHER OF THEM, AND THE LENDER MAY BE
PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS NOTE OR (B) THE
FINANCING DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A
WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR
PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.

    THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE BORROWERS,
AND THE BORROWERS HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION
HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO
IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THE BORROWERS FURTHER REPRESENT THAT
THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF
THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND
THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

    IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed
under seal by their duly authorized officers as of the date 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)
                                               James M. Herd
                                               President



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                                    Title:

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


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


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


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