**Exhibit 10.19****July, 28 2000**

 

**FIFTH AMENDMENT TO CREDIT AGREEMENT**

This fifth amendment to credit agreement(this “Amendment”) is made and entered into as of July 28, 2000, by andamong U.S. BANK NATIONAL ASSOCIATION, a national banking association(“U.S. Bank”), and MACKIE DESIGNS INC., a Washington corporation(“Borrower”).

**R E C I T A L S:**

A.      Onor about June 18, 1998, U.S. Bank and Borrower entered into thatcertain credit agreement (together with all amendments, supplements, exhibits,and modifications thereto, the “Credit Agreement”) whereby U.S. Bankagreed to extend certain credit facilities to Borrower.  U.S. Bank and Borrower have enteredinto four amendments to the Credit Agreement.

B.       Borrowerhas requested U.S. Bank to (1) increase the amount of the RevolvingLoan to $7,500,000, and (2) increase the sublimit for the issuance ofLetters of Credit.  The purpose of thisAmendment is to set forth the terms and conditions upon which U.S. Bankwill grant Borrower’s requests.

NOW, THEREFORE, in consideration of themutual covenants and conditions set forth herein, the parties agree as follows:

ARTICLE I. AMENDMENT

The Credit Agreement, as well as all ofthe other Loan Documents, are hereby amended as set forth herein.  Except as specifically provided for herein,all of the terms and conditions of the Credit Agreement and each of the otherLoan Documents shall remain in full force and effect throughout the terms ofthe Loans, as well as any extensions or renewals thereof.

 

ARTICLE II.          DEFINITIONS

As used herein, capitalized terms shallhave the meanings given to them in the Credit Agreement, except as otherwisedefined herein, or as the context otherwise requires.

ARTICLEIII.         MODIFICATIONS TO REVOLVINGLOAN

***3.1     LoanCommitment***

Section 2.1 of the Credit Agreementis hereby deleted in its entirety and replaced with the following:

          Subjectto and upon the terms and conditions set forth herein and in reliance upon therepresentations, warranties, and covenants of Borrower contained herein or madepursuant hereto, U.S. Bank will make Fundings to Borrower from time totime during the period ending on April 30, 2002 the (“Commitment Period”),but such Fundings (together with any outstanding Letters of Credit) shall notexceed, in the aggregate principal amount at any one time outstanding,$7,500,000 (the “Revolving Loan”). Borrower may borrow, repay, and reborrow hereunder either the fullamount of the Revolving Loan or any lesser sum.

***3.2     RenewalRevolving Note***

Concurrently with the execution of thisAmendment, Borrower shall execute and deliver to U.S. Bank a renewalpromissory note in the form attached hereto as Exhibit A (“RenewalRevolving Note”) which shall continue to evidence the Revolving Loan.  The Revolving Note and all previous renewalsthereof shall be marked “Renewed” and retained by U.S. Bank until theRevolving Loan is paid in full and U.S. Bank’s commitment to advanceFundings thereunder is terminated.

***3.3     RevolvingLoan Fee***

Concurrently with the execution of thisAmendment, Borrower shall pay U.S. Bank a nonrefundable loan fee for theRevolving Loan in the amount of $2,343.

***3.4     Lettersof Credit***

Section 2.7(a) of the CreditAgreement is hereby deleted in its entirety and replaced with the following:

          (a)      Subject to and upon the terms andconditions set forth herein and in reliance upon the representations,warranties, and covenants of Borrower contained herein or made pursuant hereto,U.S. Bank will issue standby and commercial letters of credit (the“Letters of Credit”) for the benefit of Borrower in forms acceptable toU.S. Bank from time to time during the Commitment Period.  The expiration date of any Letter of Creditshall not extend beyond October 31, 2002. The maximum aggregate amount of outstanding Letters of Credit plus theaggregate outstanding amount of principal and interest on the Revolving Loanshall not exceed, at any one time, $7,500,000.

          
ARTICLE IX.         CONDITIONS PRECEDENT

The modifications set forth in thisAmendment shall not be effective unless and until the following conditions havebeen fulfilled to U.S. Bank’s satisfaction:

(a)      U.S. Bankshall have received this Amendment and the Renewal Revolving Note duly executedand delivered by the parties hereto.

(b)      Borrowershall have paid the loan fees provided for in this Amendment.

(c)      Thereshall not exist any Default or Event of Default under the Credit Agreement orany other Loan Document.

(d)      Allrepresentations and warranties of Borrower contained in the Credit Agreement orotherwise made in writing in connection therewith or herewith shall be true andcorrect and in all material respects have the same effect as though suchrepresentations and warranties had been made on and as of the date of thisAmendment.

ARTICLE X.          GENERAL PROVISIONS

***5.1     Representationsand Warranties***

Borrower hereby represents and warrantsto U.S. Bank that as of the date of this Amendment, there exists noDefault or Event of Default.  Allrepresentations and warranties of Borrower contained in the Credit Agreement andthe Loan Documents, or otherwise made in writing in connection therewith, aretrue and correct as of the date of this Amendment.  U.S. Bank acknowledgesthe disclosure by Borrower of the existence of the case entitled The TravelersInsurance Company v. Eastern Acoustic Works, Inc., et al vs. Eastern AcousticWorks, Inc., Superior Court Department, Worcester Massachusetts, Civil ActionNo. 97-0922-B, and agrees that neither the existence of such case nor theresults of any trial or any pending motions in such case will be deemed aviolation of any warranty or representation given by Borrower or EasternAcoustic Works, Inc. either in this Agreement or any other agreement ordocumentation given in connection herewith. Borrower acknowledges and agrees that all of Borrower’sIndebtedness to U.S. Bank is payable without offset, defense, orcounterclaim.

***5.2     Security***

All Loan Documents evidencingU.S. Bank’s security interest in the Collateral shall remain in full forceand effect, and shall continue to secure, without change in priority, thepayment and performance of the Loans, as amended herein, and any otherIndebtedness owing from Borrower to U.S. Bank.

***5.3     Guaranty***

The parties hereto agree that eachGuaranty shall remain in full force and effect and continue to guarantee therepayment of the Loans to U.S. Bank as set forth in such Guaranty.

 

***5.4     Paymentof Expenses***

Borrower shall pay on demand all costsand expenses of U.S. Bank incurred in connection with the preparation,negotiation, execution, and delivery of this Amendment, including, withoutlimitation, reasonable attorneys’ fees incurred by U.S. Bank.

***5.5     Survivalof Credit Agreement***

The terms and conditions of the CreditAgreement and each of the other Loan Documents shall survive until all ofBorrower’s obligations under the Credit Agreement are satisfied in full.

***5.6     Year2000***

Borrower hasreviewed and assessed its business operations and computer systems andapplications to address the “year 2000 problem” (that is, that computerapplications and equipment used by Borrower, directly or indirectly throughthird parties, may have been or may be unable to properly performdate-sensitive functions before, during and after January 1, 2000).  Borrower represents and warrants that theyear 2000 problem has not resulted in and to the best knowledge of Borrowerwill not result in a material adverse change in Borrower’s business condition(financial or otherwise), operations, properties or prospects or ability torepay U.S. Bank.  Borrower agreesthat this representation and warranty will be true and correct on and shall bedeemed made by Borrower on each date Borrower requests any Funding under thisAgreement or Revolving Note or delivers any information to U.S. Bank.  Borrower will promptly deliver to U.S. Banksuch information relating to this representation and warranty as U.S. Bankrequests from time to time.

***5.7     Counterparts***

This Amendment may be executed in one ormore counterparts, each of which shall constitute an original agreement, butall of which together shall constitute one and the same agreement.

***5.8     StatutoryNotice***

ORAL AGREEMENTS OR ORAL COMMITMENTS TOLOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARENOT ENFORCEABLE UNDER WASHINGTON LAW.

[The remainder of this pageintentionally left blank.]

IN WITNESS WHEREOF, U.S. Bank andBorrower have caused this Amendment to be duly executed by their respectiveduly authorized signatories as of the date first above written.
   MACKIE DESIGNS INC.   By_____________________________________:Name:________________________________   Title:_________________________________
 
      U.S. BANK NATIONAL ASSOCIATION      By_____________________________________                   Ann B. Caldwell, Vice President
**REAFFIRMATION OF GUARANTY ANDCOLLATERAL DOCUMENTS**

Each of the undersigned hereby:  (a) acknowledges that it has read theforegoing Fifth Amendment to Credit Agreement, (b) reaffirms itsobligations under the Guaranty and the Security Agreement and other collateraldocuments evidencing security interests granted by the undersigned to U.S. Bankto secure the obligations of Borrower to U.S. Bank, (c) agrees thatits Guaranty guarantees and its Security Agreement secures the repayment of theLoans as amended by the foregoing Fifth Amendment to Credit Agreement, and (d) acknowledgesthat its obligations pursuant to its Guaranty and the Security Agreement areenforceable without defense, offset, or counterclaim.
   MACKIE  DESIGNS MANUFACTURING INC.   By______________________________________   Name:   ____________________________   Title:   _____________________________   EASTERN  ACOUSTIC WORKS, INC.   By______________________________________:Name:   ____________________________   Title:   _____________________________   BLACKSTONE  TECHNOLOGIES, INC., a Massachusetts corporation   By______________________________________:Name:   ____________________________   Title:   _____________________________   SIA  SOFTWARE COMPANY, INC., a New York corporation   By_____________________________________   Name:   ____________________________   Title:  _____________________________
 

**RENEWAL REVOLVING NOTE**
$7,500,000July 28, 2000
For value received, the undersigned,MACKIE DESIGNS INC. (“Borrower”), promises to pay to the order ofU.S. BANK NATIONAL ASSOCIATION (“U.S. Bank”), at 1420 FifthAvenue, Seattle, Washington 98101, or such other place or places as the holderhereof may designate in writing, the principal sum of Seven Million FiveHundred Thousand Dollars ($7,500,000) or so much thereof as advanced byU.S. Bank in lawful, immediately available money of the United States ofAmerica, in accordance with the terms and conditions of that certain creditagreement dated June 18, 1998, by and between Borrower and U.S. Bank(together with all supplements, exhibits, amendments and modifications thereto,including the fifth amendment to credit agreement of even date herewith, the“Credit Agreement”).  Borrower alsopromises to pay interest on the unpaid principal balance hereof, commencing asof the first date of an advance hereunder, in like money in accordance with theterms and conditions, and at the rate or rates provided in the CreditAgreement.

Borrower and all endorsers, sureties, andguarantors hereof jointly and severally waive presentment for payment, demand,notice of nonpayment, notice of protest, and protest of this Note, and allother notices in connection with the delivery, acceptance, performance,default, dishonor, or enforcement of the payment of this Note except suchnotices as are specifically required by this Note or by the Credit Agreement,and they agree that the liability of each of them shall be unconditionalwithout regard to the liability of any other party and shall not be in anymanner affected by any indulgence, extension of time, renewal, waiver, ormodification granted or consented to by U.S. Bank.  Borrower and all endorsers, sureties, andguarantors hereof, if any, (1) consent to any and all extensions of time,renewals, waivers, or modifications that may be granted by U.S. Bank withrespect to the payment or other provisions of this Note and the CreditAgreement; (2) consent to the release of any property now or hereaftersecuring this Note with or without substitution; and (3) agree thatadditional makers, endorsers, guarantors, or sureties may become parties heretowithout notice to them and without affecting their liability hereunder.

This Note is a renewal of the RevolvingNote referred to in the Credit Agreement and as such is entitled to all of thebenefits and obligations specified in the Credit Agreement, including but notlimited to any Collateral and any conditions to making advances hereunder.  Terms defined in the Credit Agreement areused herein with the same meanings. Reference is made to the Credit Agreement for provisions for therepayment of this Note and the acceleration of the maturity hereof.