<PAGE>

                                                                  Exhibit 10.18


                            ALTERNATIVE RATE OPTIONS
                                 PROMISSORY NOTE
                               (PRIME RATE, LIBOR)

$5,000,000.00                                     Dated as of: OCTOBER 21, 1997

MACKIE DESIGNS, INC.                                               ("Borrower")

U.S. BANK NATIONAL ASSOCIATION                                       ("Lender")

1.  TYPE OF CREDIT. This note is given to evidence Borrower's obligation to
repay all sums which Lender may from time to time advance to Borrower
("Advances") under a:

    / / single disbursement loan. Amounts loaned to Borrower hereunder will
be disbursed in a single Advance in the amount shown in Section 2.

    /X/ revolving line of credit. No Advances shall be made which create a
maximum amount outstanding at any one time which exceeds the maximum amount
shown in Section 2. However, Advances hereunder may be borrowed, repaid and
reborrowed, and the aggregate Advances loaned hereunder from time to time may
exceed such maximum amount.

    / / non-revolving line of credit. Each Advance made from time to time
hereunder shall reduce the maximum amount available shown in Section 2.
Advances loaned hereunder which are repaid may not be reborrowed.

2.  PRINCIPAL BALANCE. The unpaid principal balance of all Advances
outstanding under this note ("Principal Balance") at one time shall not
exceed $5,000,000.00.

3.  PROMISE TO PAY. For value received Borrower promises to pay to Lender or
order at 10800 NORTHEAST 8TH STREET, SUITE 1000, BELLEVUE, WA 98004 the
Principal Balance of this note, with interest thereon at the rate(s)
specified in Sections 4 and 11 below.

4.  INTEREST RATE. The interest rate on the Principal Balance outstanding may
vary from time to time pursuant to the provisions of this note. Subject to
the provisions of this note, Borrower shall have the option from time to time
of choosing to pay interest at the rate or rates and for the applicable
periods of time based on the rate options provided herein; provided, however,
that once Borrower notifies Lender of the rate option chosen in accordance
with the provisions of this note, such notice shall be irrevocable. The rate
options are the Prime Borrowing Rate and the LIBOR Borrowing Rate, each as
defined herein.

(a)  Definitions.  The following terms shall have the following meanings:

        "Business Day" means any day other than a Saturday, Sunday, or other
day that commercial banks in Seattle, Washington, Portland, Oregon or New
York City are authorized or required by law to close; provided, however that
when used in connection with a LIBOR Rate, LIBOR Amount or LIBOR Interest
Period such term shall also exclude any day on which dealings in U.S. dollar
deposits are not carried on in the London interbank market.

        "LIBOR Amount" means each principal amount for which Borrower chooses
to have the LIBOR Borrowing Rate apply for any specified LIBOR Interest
Period.

                                       34
<PAGE>

        "LIBOR Interest Period" means as to any LIBOR Amount, a period of 1,
2, 3, 6, 9 OR 12 months commencing on the date the LIBOR Borrowing Rate
becomes applicable thereto; provided, however, that: (i) the first day of
each LIBOR Interest Period must be a Business Day; (ii) no LIBOR Interest
Period shall be selected which would extend beyond APRIL 30, 1998; (iii) no
LIBOR Interest Period shall extend beyond the date of any principal payment
required under Section 6 of this note, unless the sum of the Prime Rate
Amount, plus LIBOR Amounts with LIBOR Interest Periods ending on or before
the scheduled date of such principal payment, plus principal amounts
remaining unborrowed under a line of credit, equals or exceeds the amount of
such principal payment; (iv) any LIBOR Interest Period which would otherwise
expire on a day which is not a Business Day, shall be extended to the next
succeeding Business Day, unless the result of such extension would be to
extend such LIBOR Interest Period into another calendar month, in which event
the LIBOR Interest Period shall end on the immediately preceding Business
Day; and (v) any LIBOR Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such LIBOR Interest
Period) shall end on the last Business Day of a calendar month.

        "LIBOR Rate" means, for any LIBOR Interest Period, the rate per annum
(computed on the basis of a 360-day year and the actual number of days
elapsed and rounded upward to the nearest 1/16 of 1%) established by Lender
as its LIBOR Rate, based on Lender's determination, on the basis of such
factors as Lender deems relevant, of the rate of interest at which U.S.
dollar deposits would be offered to U. S. Bank National Association in the
London interbank market at approximately 11 a.m. London time on the date
which is two Business Days prior to the first day of such LIBOR Interest
Period for delivery on the first day of such LIBOR Interest Period for the
number of months therein; provided, however, that the LIBOR Rate shall be
adjusted to take into account the maximum reserves required to be maintained
for Eurocurrency liabilities by banks during each such LIBOR Interest Period
as specified in Regulation D of the Board of Governors of the Federal Reserve
System or any successor regulation.

        "Prime Rate" means the rate of interest which Lender from time to
time establishes as its prime rate and is not, for example, the lowest rate
of interest which Lender collects from any borrower or class of borrowers.
When the Prime Rate is applicable under Section 4(b) or 11(b), the interest
rate hereunder shall be adjusted without notice effective on the day the
Prime Rate changes, but in no event shall the rate of interest be higher than
allowed by law.

        "Prime Rate Amount" means any portion of the Principal
Balance bearing interest at the Prime Borrowing Rate.

(b)  The Prime Borrowing Rate.

     (i) The Prime Borrowing Rate is a per annum rate equal to the Prime Rate
plus 0.00% per annum.

     (ii) Whenever Borrower desires to use the Prime Borrowing Rate option,
Borrower shall give Lender notice orally or in writing in accordance with
Section 15 of this note, which notice shall specify the requested effective
date (which must be a Business Day) and principal amount of the Advance or
increase in the Prime Rate Amount, and whether Borrower is requesting a new
Advance under a line of credit or conversion of a LIBOR Amount to the Prime
Borrowing Rate.

     (iii) Subject to Section 11 of this note, interest shall accrue on the
unpaid Principal Balance at the Prime Borrowing Rate unless and except to the
extent that the LIBOR Borrowing Rate is in effect.

(c)  The LIBOR Borrowing Rate.

     (i) The LIBOR Borrowing Rate is the LIBOR Rate plus 1.50% per annum.

                                       35
<PAGE>

     (ii) Borrower may obtain LIBOR Borrowing Rate quotes from Lender between
8:00 a.m. and 10:00 a.m. (Portland, Oregon time) on any Business Day.
Borrower may request an Advance, conversion of any portion of the Prime Rate
Amount to a LIBOR Amount or a new LIBOR Interest Period for an existing LIBOR
Amount, at such rate only by giving Lender notice in accordance with Section
4(c)(iii) before 10:00 a.m. (Portland, Oregon time) on such day.

     iii) Whenever Borrower desires to use the LIBOR Borrowing Rate option,
Borrower shall give Lender irrevocable notice (either in writing or orally
and promptly confirmed in writing) between 8:00 a.m. and 10:00 a.m.
(Portland, Oregon time) two (2) Business Days prior to the desired effective
date of such rate. Any oral notice shall be given by, and any written notice
or confirmation of an oral notice shall be signed by, the person(s)
authorized in Section 15 of this note, and shall specify the requested
effective date of the rate, LIBOR Interest Period and LIBOR Amount, and
whether Borrower is requesting a new Advance at the LIBOR Borrowing Rate
under a line of credit, conversion of all or any portion of the Prime Rate
Amount to a LIBOR Amount, or a new LIBOR Interest Period for an outstanding
LIBOR Amount. Notwithstanding any other term of this note, Borrower may elect
the LIBOR Borrowing Rate in the minimum principal amount of $1,000,000.00 and
in multiples of $500,000.00 above such amount; provided, however, that no
more than THREE separate LIBOR Interest Periods may be in effect at any one
time.

     (iv) If at any time the LIBOR Rate is unascertainable or unavailable to
Lender or if LIBOR Rate loans become unlawful, the option to select the LIBOR
Borrowing Rate shall terminate immediately. If the LIBOR Borrowing Rate is
then in effect, (A) it shall terminate automatically with respect to all
LIBOR Amounts (i) on the last day of each then applicable LIBOR Interest
Period, if Lender may lawfully continue to maintain such loans, or (ii)
immediately if Lender may not lawfully continue to maintain such loans
through such day, and (B) subject to Section 11, the Prime Borrowing Rate
automatically shall become effective as to such amounts upon such termination.

     (v) If at any time after the date hereof (A) any revision in or adoption
of any applicable law, rule, or regulation or in the interpretation or
administration thereof (i) shall subject Lender or its Eurodollar lending
office to any tax, duty, or other charge, or change the basis of taxation of
payments to Lender with respect to any loans bearing interest based on the
LIBOR Rate, or (ii) shall impose or modify any reserve, insurance, special
deposit, or similar requirements against assets of, deposits with or for the
account of, or credit extended by Lender or its Eurodollar lending office, or
impose on Lender or its Eurodollar lending office any other condition
affecting any such loans, and (B) the result of any of the foregoing is (i)
to increase the cost to Lender of making or maintaining any such loans or
(ii) to reduce the amount of any sum receivable under this note by Lender or
its Eurodollar lending office, Borrower shall pay Lender within 15 days after
demand by Lender such additional amount as will compensate Lender for such
increased cost or reduction. The determination hereunder by Lender of such
additional amount shall be conclusive in the absence of manifest error. If
Lender demands compensation under this Section 4(c)(v), Borrower may upon
three (3) Business Days' notice to Lender pay the accrued interest on all
LIBOR Amounts, together with any additional amounts payable under Section
4(c)(vi). Subject to Section 11, upon Borrower's paying such accrued interest
and additional costs, the Prime Borrowing Rate immediately shall be effective
with respect to the unpaid principal balance of such LIBOR Amounts.

     (vi) Borrower shall pay to Lender, on demand, such amount as Lender
reasonably determines (determined as though 100% of the applicable LIBOR
Amount had been funded in the London interbank market) is necessary to
compensate Lender for any direct or indirect losses, expenses, liabilities,
costs, expenses or reductions in yield to Lender, whether incurred in
connection with liquidation or re-employment of funds or otherwise, incurred
or sustained by Lender as a result of: (A) Any payment or prepayment of a
LIBOR Amount, termination of the LIBOR Borrowing Rate or conversion of a
LIBOR Amount to the Prime Borrowing Rate on a day other than the last day of
the applicable LIBOR Interest

                                       36
<PAGE>

Period (including as a result of acceleration or a notice pursuant to Section
4 (c) (v)); or (B) Any failure of Borrower to borrow, continue or prepay any
LIBOR Amount or to convert any portion of the Prime Rate Amount to a LIBOR
Amount after Borrower has given a notice thereof to Lender.

     (vii) If Borrower chooses the LIBOR Borrowing Rate, Borrower shall pay
interest based on such rate, plus any other applicable taxes or charges
hereunder, even though Lender may have obtained the funds loaned to Borrower
from sources other than the London interbank market. Lender's determination
of the LIBOR Borrowing Rate and any such taxes or charges shall be conclusive
in the absence of manifest error.

     (viii) Notwithstanding any other term of this note, Borrower may not
select the LIBOR Borrowing Rate if an event of default hereunder has occurred
and is continuing.

     (ix) Nothing contained in this note, including without limitation the
determination of any LIBOR Interest Period or Lender's quotation of any LIBOR
Borrowing Rate, shall be construed to prejudice Lender's right, if any, to
decline to make any requested Advance or to require payment on demand.

5.  COMPUTATION OF INTEREST. All interest under Section 4 and Section 11 will
be computed at the applicable rate based on a 360-day year and applied to the
actual number of days elapsed.

6.  PAYMENT SCHEDULE.

(a)  Principal.  Principal shall be paid:

          / / on demand.

          /X/ on demand, or if no demand, on APRIL 30, 1998.

          / / on       ,

          / / subject to Section 8, in installments of

              / / each, plus accrued interest, beginning on          and on
                  the same day of each       thereafter until       when
                  the entire Principal Balance plus interest thereon shall
                  be due and payable.
              / / each, including accrued interest, beginning on
                  and on the same day of each       thereafter until
                  when the entire Principal Balance plus interest thereon
                  shall be due and payable.

(b)  Interest.

     (i)  Interest on the Prime Rate Amount shall be paid:

          /X/ on the LAST day of NOVEMBER, 1997, and on the same day
                   of each MONTH thereafter prior to maturity and at
                   maturity.

          / / at maturity.

          / / at the time each principal installment is due and at
                   maturity.

          / /

     (ii)  Interest on all LIBOR Amounts shall be paid:

           / / on the last day of the applicable LIBOR Interest Period,
               and if such LIBOR Interest Period is longer than
               three months, on the last day of each three month
               period occurring during such LIBOR Interest Period,
               and at maturity.


                                       37
<PAGE>

                   /X/ on the LAST day of NOVEMBER, 1997, and on the same day
                       of each MONTH thereafter prior to maturity and at
                       maturity.

                   / / at maturity.

                   / / at the time each principal installment is due and at
                           maturity.

                   / /

7.  PREPAYMENT.

(a)  Prepayments of all or any part of the Prime Rate Amount may be made at
any time without penalty.

(b)  Except as otherwise specifically set forth herein, Borrower may not
prepay all or any part of any LIBOR Amount or terminate any LIBOR Borrowing
Rate, except on the last day of the applicable LIBOR Interest Period.

(c) Principal prepayments will not postpone the date of or change the amount
of any regularly scheduled payment. At the time of any principal prepayment,
all accrued interest, fees, costs and expenses shall also be paid.

8.  CHANGE IN PAYMENT AMOUNT. Each time the interest rate on this note
changes the holder of this note may, from time to time, in holder's sole
discretion, increase or decrease the amount of each of the installments
remaining unpaid at the time of such change in rate to an amount holder in
its sole discretion deems necessary to continue amortizing the Principal
Balance at the same rate established by the installment amounts specified in
Section 6(a), whether or not a "balloon" payment may also be due upon
maturity of this note. Holder shall notify the undersigned of each such
change in writing. Whether or not the installment amount is increased under
this Section 8, Borrower understands that, as a result of increases in the
rate of interest the final payment due, whether or not a "balloon" payment,
shall include the entire Principal Balance and interest thereon then
outstanding, and may be substantially more than the installment specified in
Section 6.

9.  ALTERNATE PAYMENT DATE. Notwithstanding any other term of this note, if
in any month there is no day on which a scheduled payment would otherwise be
due (e.g. February 31), such payment shall be paid on the last banking day of
that month.

10.  PAYMENT BY AUTOMATIC DEBIT.

/X/  Borrower hereby authorizes Lender to automatically deduct the amount of
all principal and interest payments from account number       at
2087-029847. If there are insufficient funds in the account to pay the
automatic deduction in full, Lender may allow the account to become
overdrawn, or Lender may reverse the automatic deduction. Borrower will pay
all the fees on the account which result from the automatic deductions,
including any overdraft and non-sufficient funds charges. If for any reason
Lender does not charge the account for a payment, or if an automatic payment
is reversed, the payment is still due according to this note. If the account
is a Money Market Account, the number of withdrawals from that account is
limited as set out in the account agreement. Lender may cancel the automatic
deduction at any time in its discretion.

Provided, however, if no account number is entered above, Borrower does not
want to make payments by automatic debit.

11.  DEFAULT.


                                       38
<PAGE>

(a)  Without prejudice to any right of Lender to require payment on demand or
to decline to make any requested Advance, each of the following shall be an
event of default: (i) Borrower fails to make any payment when due. (ii)
Borrower fails to perform or comply with any term, covenant or obligation in
this note or any agreement related to this note, or in any other agreement or
loan Borrower has with Lender. (iii) Borrower defaults under any loan,
extension of credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person that may materially
affect any of Borrower's property or Borrower's ability to repay this note or
perform Borrower's obligations under this note or any related documents. (iv)
Any representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now
or at the time made or furnished. (v) Borrower dies, becomes insolvent,
liquidates or dissolves, a receiver is appointed for any part of Borrower's
property, Borrower makes an assignment for the benefit of creditors, or any
proceeding is commenced either by Borrower or against Borrower under any
bankruptcy or insolvency laws. (vi) Any creditor tries to take any of
Borrower's property on or in which Lender has a lien or security interest.
This includes a garnishment of any of Borrower's accounts with Lender. (vii)
Any of the events described in this default section occurs with respect to
any general partner in Borrower or any guarantor of this note, or any
guaranty of Borrower's indebtedness to Lender ceases to be, or is asserted
not to be, in full force and effect. (viii) There is any material adverse
change in the financial condition or management of Borrower or Lender in good
faith deems itself insecure with respect to the payment or performance of
Borrower's obligations to Lender. If this note is payable on demand, the
inclusion of specific events of default shall not prejudice Lender's right to
require payment on demand or to decline to make any requested Advance.

(b)  Without prejudice to any right of Lender to require payment on demand,
upon the occurrence of an event of default, Lender may declare the entire
unpaid Principal Balance on this note and all accrued unpaid interest
immediately due and payable, without notice. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted
under applicable law, increase the interest rate on this note to a rate equal
to the Prime Borrowing Rate plus 5%. The interest rate will not exceed the
maximum rate permitted by applicable law. In addition, if any payment of
principal or interest is 15 or more days past due, Borrower will be charged a
late charge of 5% of the delinquent payment.

12.  EVIDENCE OF PRINCIPAL BALANCE; PAYMENT ON DEMAND. Holder's records
shall, at any time, be conclusive evidence of the unpaid Principal Balance
and interest owing on this note. Notwithstanding any other provisions of this
note, in the event holder makes Advances hereunder which result in an unpaid
Principal Balance on this note which at any time exceeds the maximum amount
specified in Section 2, Borrower agrees that all such Advances, with
interest, shall be payable on demand.

13. LINE OF CREDIT PROVISIONS. If the type of credit indicated in Section 1
is a revolving line of credit or a non-revolving line of credit, Borrower
agrees that Lender is under no obligation and has not committed to make any
Advances hereunder. Each Advance hereunder shall be made at the sole option
of Lender.

14. DEMAND NOTE. If this note is payable on demand, Borrower acknowledges and
agrees that (a) Lender is entitled to demand Borrower's immediate payment in
full of all amounts owing hereunder and (b) neither anything to the contrary
contained herein or in any other loan documents (including but not limited
to, provisions relating to defaults, rights of cure, default rate of
interest, installment payments, late charges, periodic review of Borrower's
financial condition, and covenants) nor any act of Lender pursuant to any
such provisions shall limit or impair Lender's right or ability to require
Borrower's payment in full of all amounts owing hereunder immediately upon
Lender's demand.

15.  REQUESTS FOR ADVANCES.


                                       39
<PAGE>

(a)  Any Advance may be made or interest rate option selected upon the
request of Borrower (if an individual), any of the undersigned (if Borrower
consists of more than one individual), any person or persons authorized in
subsection (b) of this Section 15, and any person or persons otherwise
authorized to execute and deliver promissory notes to Lender on behalf of
Borrower.

(b)  Borrower hereby authorizes any ONE of the following individuals to
request Advances and to select interest rate options: GREG C. MACKIE, ROY
WEMYSS AND WILLIAM A GARRARD unless Lender is otherwise instructed in writing.

(c)  All Advances shall be disbursed by deposit directly to Borrower's
account number 0287-029847 at a branch of Lender, or by cashier's check
issued to Borrower.

(d)  Borrower agrees that Lender shall have no obligation to verify the
identity of any person making any request pursuant to this Section 15, and
Borrower assumes all risks of the validity and authorization of such
requests. In consideration of Lender agreeing, at its sole discretion, to
make Advances upon such requests, Borrower promises to pay holder, in
accordance with the provisions of this note, the Principal Balance together
with interest thereon and other sums due hereunder, although any Advances may
have been requested by a person or persons not authorized to do so.

16.  PERIODIC REVIEW. Lender will review Borrower's credit accommodations
periodically. At the time of the review, Borrower will furnish Lender with
any additional information regarding Borrower's financial condition and
business operations that Lender requests. This information may include but is
not limited to, financial statements, tax returns, lists of assets and
liabilities, agings of receivables and payables, inventory schedules, budgets
and forecasts. If upon review, Lender, in its sole discretion, determines
that there has been a material adverse change in Borrower's financial
condition, Borrower will be in default. Upon default, Lender shall have all
rights specified herein.

17.  NOTICES. Any notice hereunder may be given by ordinary mail, postage
paid and addressed to Borrower at the last known address of Borrower as shown
on holder's records. If Borrower consists of more than one person,
notification of any of said persons shall be complete notification of all.

18.  ATTORNEY FEES. Whether or not litigation or arbitration is commenced,
Borrower promises to pay all costs of collecting overdue amounts. Without
limiting the foregoing, in the event that holder consults an attorney
regarding the enforcement of any of its rights under this note or any
document securing the same, or if this note is placed in the hands of an
attorney for collection or if suit or litigation is brought to enforce this
note or any document securing the same, Borrower promises to pay all costs
thereof including such additional sums as the court or arbitrator(s) may
adjudge reasonable as attorney fees, including without limitation, costs and
attorney fees incurred in any appellate court, in any proceeding under the
bankruptcy code, or in any receivership and post-judgment attorney fees
incurred in enforcing any judgment.

19.  WAIVERS; CONSENT. Each party hereto, whether maker, co-maker, guarantor
or otherwise, waives diligence, demand, presentment for payment, notice of
non-payment, protest and notice of protest and waives all defenses based on
suretyship or impairment of collateral. Without notice to Borrower and
without diminishing or affecting Lender's rights or Borrower's obligations
hereunder, Lender may deal in any manner with any person who at any time is
liable for, or provides any real or personal property collateral for, any
indebtedness of Borrower to Lender, including the indebtedness evidenced by
this note. Without limiting the foregoing, Lender may, in its sole
discretion: (a) make secured or unsecured loans to Borrower and agree to any
number of waivers, modifications, extensions and renewals of any length of
such loans, including the loan evidenced by this note; (b) impair, release
(with or without substitution of new collateral), fail to perfect a security
interest in, fail to preserve the value of, fail to

                                       40
<PAGE>

dispose of in accordance with applicable law, any collateral provided by any
person; (c) sue, fail to sue, agree not to sue, release, and settle or
compromise with, any person.

20.  JOINT AND SEVERAL LIABILITY. All undertakings of the undersigned
Borrowers are joint and several and are binding upon any marital community of
which any of the undersigned are members. Holder's rights and remedies under
this note shall be cumulative.

21.  SEVERABILITY. If any term or provision of this note is declared by a
court of competent jurisdiction to be illegal, invalid or unenforceable for
any reason whatsoever, such illegality, invalidity or unenforceability shall
not affect the balance of the terms and provisions hereof, which terms and
provisions shall remain binding and enforceable, and this note shall be
construed as if such illegal, invalid or unenforceable provision had not been
contained herein.

22.  ARBITRATION.

(a)  Either Lender or Borrower may require that all disputes, claims,
counterclaims and defenses, including those based on or arising from any
alleged tort ("Claims") relating in any way to this note or any transaction
of which this note is a part (the "Loan"), be settled by binding arbitration
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association and Title 9 of the U.S. Code. All Claims will be
subject to the statutes of limitation applicable if they were litigated. This
provision is void if the Loan, at the time of the proposed submission to
arbitration, is secured by real property located outside of Oregon or
Washington, or if the effect of the arbitration procedure (as opposed to any
Claims of Borrower) would be to materially impair Lender's ability to realize
on any collateral securing the Loan.

(b)  If arbitration occurs and each party's Claim is less than $100,000, one
neutral arbitrator will decide all issues; if any party's Claim is $100,000
or more, three neutral arbitrators will decide all issues. All arbitrators
will be active Washington State Bar members in good standing. All arbitration
hearings will be held in Seattle, Washington. In addition to all other
powers, the arbitrator(s) shall have the exclusive right to determine all
issues of arbitrability. Judgment on any arbitration award may be entered in
any court with jurisdiction.

(c)  If either party institutes any judicial proceeding relating to the Loan,
such action shall not be a waiver of the right to submit any Claim to
arbitration. In addition, each has the right before, during and after any
arbitration to exercise any number of the following remedies, in any order or
concurrently: (i) setoff; (ii) self-help repossession; (iii) judicial or
non-judicial foreclosure against real or personal property collateral; and
(iv) provisional remedies, including injunction, appointment of receiver,
attachment, claim and delivery and replevin.

23.  GOVERNING LAW. This note shall be governed by and construed and enforced
in accordance with the laws of the State of Washington without regard to
conflicts of law principles; provided, however, that to the extent that
Lender has greater rights or remedies under Federal law, this provision shall
not be deemed to deprive Lender of such rights and remedies as may be
available under Federal law.

24.  DISCLOSURE.

Oral agreements or oral commitments to loan money, extend credit, or to
forbear from enforcing repayment of a debt are not enforceable under
Washington law.

EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF
THIS DOCUMENT.

                                       41
<PAGE>

BORROWER: MACKIE DESIGNS, INC.


BY:       /s/ William A. Garrard
   -----------------------------------

TITLE:              CFO
      -----------------------------------

-------------------------------------------------------------------------------

For valuable consideration, Lender agrees to the terms of the arbitration
provision set forth in this note.


                            Lender Name:  U.S. Bank National Association

                            By:           /s/  Ann B. Caldwell
                                  --------------------------------------
                            Title:           Vice President
                                  --------------------------------------


                                       42