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EXHIBIT 10.27
THIRD AMENDMENT
TO
FINANCING AGREEMENT
THIS THIRD AMENDMENT TO FINANCING AGREEMENT (this "Agreement") is made
this 23rd day of October, 1996, by and among POLK AUDIO, INC., a corporation
organized under the laws of the State of Maryland ("Polk Audio"), XXXXXXXXX
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 and as further modified by a Second Amendment to
Financing Agreement dated March 22, 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 $8,000,000.
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:
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1. The Borrowers and the Lenders 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)
October 31, 1998, (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) $8,000,000
until March 31, 1997 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) A new section 2.2.7 is hereby added to the Financing
Agreement as follows:
"2.2.7 The Borrowers shall make mandatory prepayments as
required to comply with the reduction in the maximum principal amount of
the Revolving Loan as set forth in Section 2.2.1."
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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 $8,000,000 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 $6,500,000 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 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/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxx Xxxxxx X. Xxxxxxx
CEO
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxx, Xx. (SEAL)
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Xxxx X. Xxxxx Name:
Title: Chairman
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WITNESS: XXXXXXXXX INVESTMENT CORP. (formerly
known as POLK INVESTMENT CORP.)
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxx
Title: President
WITNESS: POLK INTERNATIONAL SALES CORPORATION
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxx
Title: President
WITNESS: POLK AUDIO EUROPE, INC.
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx (SEAL)
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Xxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxx
Title: President
WITNESS: NATIONSBANK, N.A.
By: (SEAL)
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Xxxxxx X. Xxxxxxx
Vice President
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