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EXHIBIT 10.28
REVOLVING CREDIT LINE
$8,000,000 Baltimore, Maryland
October 23, 1996
FOR VALUE RECEIVED, POLK AUDIO, INC., a corporation organized under the
laws of the State of Maryland, ▇▇▇▇▇▇▇▇▇ 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 DOLLARS ($8,000,000) (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.
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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 October 31, 1998.
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.
3. Default Interest. Upon the occurrence of any 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
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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 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 Third 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 and as further amended by a Second Amendment
dated March 22, 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
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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 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
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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
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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
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.
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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 (i) the mailing of a copy thereof by certified
mail, postage prepaid, return receipt requested, to the Borrowers and (ii)
serving a copy thereof upon
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 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 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 to 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
OPTION 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
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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/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (SEAL)
-------------------------------- -----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
CEO
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. (SEAL)
-------------------------------- -----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Chairman
WITNESS: BRITANNIA INVESTMENT CORP. (formerly
known as POLK INVESTMENT CORP.)
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (SEAL)
-------------------------------- -----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
WITNESS: POLK INTERNATIONAL SALES CORPORATION
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (SEAL)
-------------------------------- -----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
WITNESS: POLK AUDIO EUROPE, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (SEAL)
-------------------------------- -----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
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